Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — AGRICULTURE, FISHERIES AND FOOD

Food Standards Agency

Ms Shipley: To ask the Minister of Agriculture, Fisheries and Food what preparations his Department is making for the establishment of a food standards agency. [7274]

The Minister of Agriculture, Fisheries and Food (Dr. Jack Cunningham): My Department, with the Department of Health and other interested Departments, is working towards publication of a White Paper in the autumn, which will set out the Government's proposals for the food standards agency. We have already made changes to the organisation of the Ministry of Agriculture, Fisheries and Food to prepare for the agency.

Ms Shipley: Many of my constituents in Stourbridge have raised the issue of food standards and safety with me, both before and after the general election. Can my right hon. Friend be more specific about publication of the White Paper and tell me what food standards measures his Department is implementing in the interim?

Dr. Cunningham: We have already conducted preliminary consultations on Professor James's report. My Department is now analysing the responses to that consultation. We shall draft the White Paper and make it available to the House and the public as soon as we possibly can. I am working with my right hon. Friend the Secretary of State for Health on appropriate interim arrangements to ensure that, if necessary, we can expeditiously deal with any food health problems that may arise.

Mrs. Spelman: Does the Minister agree that a Cabinet Minister should retain ultimate responsibility for food safety in the United Kingdom?

Dr. Cunningham: The food standards agency will be an independent executive agency. It will report to the Secretary of State for Health.

Dr. Gibson: Does my right hon. Friend agree that development of the food standards agency will require the support of world-class research into the food sciences?

If he does, will he consider a visit to the Institute of Food Research, in Norwich, as a part of the essential process of establishing a food standards agency?

Dr. Cunningham: Yes. As a scientist myself, I am absolutely certain that any decisions that we make on the matter should be based on the very best possible scientific analysis and advice. In answer to my hon. Friend's second question, yes, I will try to visit his constituents in Norwich.

Mr. Baldry: Doubtless the Minister will want the maximum openness and transparency on the issue. Will he, therefore, kindly undertake to place in the Library the responses to Professor James's consultation, so that hon. Members may have some good reading over the long recess? Will he also consider following the excellent example of the Secretary of State for International Development, who, before publication of her White Paper, held a debate in the House in Government time? May we have a debate, in Government time, before publication of the White Paper on the food standards agency?

Dr. Cunningham: On the first part of the question, I should tell the Gentleman that there have been more than 600 responses to the consultation. In the interests of openness and transparency, I think that I can say—although that has a certain European parliamentary ring about it—that, yes, I will place copies in the Library. On the second part of the hon. Gentleman's question, debates in Government time are a matter for my right hon. Friend the President of the Council.

Genetically Engineered Crops

Dr. Lynne Jones: To ask the Minister of Agriculture, Fisheries and Food what plans he has to ensure that genetically engineered crops are separated from the main crop. [7276]

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Jeff Rooker): Under World Trade Organisation rules, it is not possible for Governments to demand segregation of genetically modified crops that have been approved as safe. Manufacturers and retailers, however, are free to pursue segregation on commercial grounds. Many United Kingdom supermarkets are demanding ever greater product traceability from their suppliers. There is no reason why they cannot do the same with genetically modified crops.

Dr. Jones: Does my hon. Friend agree that the public's right to have their food labelled with pertinent information is more important than the rights of multinational food companies to make large profits by claiming that they are unable to separate genetically modified crops from the main crop? Will he use his best endeavours to ensure that such labelling occurs?

Mr. Rooker: The answer to both my hon. Friend's questions is yes.

Hill Livestock Compensatory Allowances

Mr. Collins: To ask the Minister of Agriculture, Fisheries and Food if he will make a statement about the operation of hill livestock compensatory allowances. [7277]

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Elliot Morley): In England, 98 per cent. of claims under the 1997 scheme were paid by the target date of 30 April. The 1998 scheme is now open for cattle claims, and the application period for sheep claims will be open as usual in December.

Mr. Collins: Does the Parliamentary Secretary agree that much of the beauty of areas such as the Lake district depends on the hard work of hill farmers? Is he aware that, with sheep prices now falling and the continuing and accelerating difficulties in the beef sector, many hill farmers in my constituency and elsewhere are facing genuine problems? Will he therefore look with sympathy on their case for an uprating of HLCAs in the coming year?

Mr. Morley: HLCAs are indeed an important support package for farmers in the uplands. However, I have to point out that when the Tory party was in government it made no provision for the £60 million that it gave to the beef sector in the uplands this year. That £60 million is not in next year's accounts, which will cause some difficulty in providing support through HLCAs.

Mr. Curry: Would not the review of the upland payments be easier if the Government acted now to prevent the damage it will inflict on the incomes of hill farmers, and beef suckler herds in particular, and withdrew the ill-founded proposal to put a 560 kg weight limit on the animals eligible for culling? Does he not realise that that alone could cost hill farmers—honest hill farmers, not those out to fiddle the system—up to £150 per beast? With the next green pound revaluation now imminent, why does the Parliamentary Secretary not do what the Ministers of eight other countries have already done and go to Brussels to get the compensation to which he is entitled for his farmers, who will otherwise suffer?

Mr. Morley: May I first welcome the right hon. Gentleman to his first Question Time in his new role? I repeat: if the previous Government felt that support for the suckler sector was so important, why did they make no provision for the £60 million in the Ministry's budget next year? It is true that there is hardship for the suckler sector because of the changes that have been made, but the Opposition spokesman will be aware that the total cost of bovine spongiform encephalopathy support is £3.5 billion of public money, spending for which the previous Administration bear some responsibility because of their incompetence.

Mr. Curry: Does the hon. Gentleman not realise that, since this Government came to power, there have been two major green pound revaluations, because the Chancellor let go of control of interest rates, and a third is imminent? As farmers are suffering severe income loss as a result, are they not entitled to get compensation from Brussels? Why does the hon. Gentleman not do what eight

of his colleagues at the Council of Ministers are doing and get that benefit for his farmers—or does he not care enough?

Mr. Morley: In relation to the revaluation of the green pound, my right hon. Friend the Minister of Agriculture, Fisheries and Food has already met a delegation of farmers from the National Farmers Union and made it clear that we are considering that point.

Meat Hygiene Service

Mr. Bayley: To ask the Minister of Agriculture, Fisheries and Food if he will make a statement about the future of the Meat Hygiene Service. [7278]

Dr. Jack Cunningham: The Government are looking carefully at the options for the future of the Meat Hygiene Service following the consultation exercise on Professor James's report into the establishment of an independent food standards agency. The report itself recommends that the new agency should take over responsibility for the Meat Hygiene Service.

Mr. Bayley: I thank my right hon. Friend for that useful answer. I, too, think that the Meat Hygiene Service should become part of the agency. My right hon. Friend will be aware that York is not just Britain's but Europe's biggest centre for bioscience and has many agencies from his Department other than the Meat Hygiene Service—for example, the Pesticides Safety Directorate and the Central Science Laboratory. Would he like to come to York to see what they contribute to food safety, and will he give me an assurance that, wherever the headquarters of the new food standards agency is based, the Meat Hygiene Service will remain in York?

Dr. Cunningham: I very much hope that my hon. Friend remains in York, too, as the Member of Parliament. No proposal has been made, by Professor James or anyone else, to relocate the Meat Hygiene Service. I can assure my hon. Friend on that point. In the coming months, I will try hard to visit him and his constituents in York.

Mr. Clifton-Brown: Does the Minister consider that the food standards agency should adopt the role of regulator of the Meat Hygiene Service, which should remain? Does he also believe that it is in the interests of the public that we have the highest possible standards of hygiene and that the consumer deserves nothing less from products coming in from Europe?

Dr. Cunningham: The food standards agency will subsume the Meat Hygiene Service and its necessary activities. I certainly agree that we must drive up standards of hygiene in food generally and in the meat industries in particular. I hope that my European ministerial colleagues at next week's Council of Ministers vote to implement the same rigorous controls over specified beef risk materials that we have in this country. As I have told the House on more than one occasion, if they do not, I shall table orders in the House to ensure that beef imported to Britain is subject to those rigorous controls.

Mr. David Heath: Is the Minister aware that some of the abattoirs that have worked most closely with the Meat


Hygiene Service and offer the best levels of hygiene and welfare facilities have been inexplicably excluded from the over-30-months cull? That is causing enormous difficulties for farmers, agents and hauliers throughout my constituency and, I think, in most of the country. Will he intervene to avoid another agricultural crisis?

Dr. Cunningham: I am not aware of any impending crisis. The scheme, which, as I am sure that the hon. Gentleman knows, is administered by the Intervention Board, is subject to competitive tendering to ensure that we get the best value for the large amounts of taxpayers' money involved, running to hundreds of millions of pounds.

Common Fisheries Policy

Mr. Bernard Jenkin: To ask the Minister of Agriculture, Fisheries and Food what proposals he has for reform of the common fisheries policy. [7280]

Dr. Jack Cunningham: The Government are pressing for the common fisheries policy to be improved in a number of ways, including strengthening the economic benefits that countries derive from their quotas, improving the effectiveness of enforcement measures and introducing a greater regional dimension into decision making.

Mr. Jenkin: Will the Minister give the House two assurances? First, will he assure us that coastal strips predominantly fished by the non-sector industry will for ever remain exclusively for UK boats after 2002, when the current derogation expires? Secondly, will he assure us that the North sea will never be fished by other national fleets except those that already fish there? The pressure on quotas is already destroying this country's inshore fisheries.

Dr. Cunningham: I can give the hon. Gentleman the assurances that he seeks on both counts. I know that fishermen in Brightlingsea, West Mersea and Wivenhoe in his constituency have had particular difficulties caused by over-fishing. We want to press ahead with restructuring our fishing industry to try to deal once and for all with problems such as those that he has rightly drawn to my attention.

Mr. Andrew George: During the forthcoming UK presidency of the European Union, will the Minister ensure that reform of the common fisheries policy is given clear priority and that Britain sets the agenda for it? Does he believe that our presidency provides an opportunity to bring forward the date of the much needed review of the common fisheries policy?

Dr. Cunningham: We certainly intend to set the agenda. We must recognise that we cannot totally control it, because it is partly set by the circumstances that we inherit from the previous presidency. We want reform of the common fisheries policy to be on the agenda. I doubt that there is any way in which we can advance the date for the changes that the hon. Gentleman referred to, but we have begun to prepare for our presidency. My hon. Friend the Parliamentary Secretary to the Ministry of

Agriculture, Fisheries and Food and I had a meeting earlier this week with the leaders of the British fishing industry from all over the United Kingdom.

Mrs. Betty Williams: I applaud the Government's efforts to tackle the problems of the fishing industry, which are in contrast to the empty talk we had from Conservative Members when they were in government. What is being done to improve the enforcement of the measures?

Dr. Cunningham: I am pleased to say that one of the commitments my right hon. Friend the Prime Minister received from the President of the Commission was that we would move towards the uniform enforcement of fishing controls across the European Union—something that should have been done a considerable time ago.

Mr. Hogg: In seeking to tackle the problem of quota hoppers, in particular by the proposals on landing and crewing, the right hon. Gentleman is likely to be frustrated by the treaty of Rome, as happened in the Factortame case. Does he accept that, in reality, the only way forward is to amend the treaty of Rome, particularly the provisions that deal with the movement of persons and capital? That can be done only at an intergovernmental conference.

Dr. Cunningham: No, I do not agree. Even if I thought that the right hon. and learned Gentleman was right on that point, we realise clearly that there is no support from other member states of the European Union for such an approach. The right hon. and learned Gentleman referred to the Factortame case, over which the United Kingdom was in difficulties. The difference now is that we have a letter of authority from the President of the Commission for what we intend to do. If our proposal was the subject of a legal challenge, the President of the Commission would be on our side, as opposed to being against us, as happened in the past.

Quarantine

Mr. Flynn: To ask the Minister of Agriculture, Fisheries and Food what proposals he has to improve the welfare of animals held in quarantine. [7281]

Mr. Morley: We are currently inspecting those quarantine kennels that have signed up to a voluntary code of practice for the welfare of dogs and cats in quarantine premises to ensure they can meet all its requirements. We would like to put the code on a statutory basis when parliamentary time can be found.

Mr. Flynn: Is my hon. Friend shocked by the list of situations, reported to him by Passports For Pets, in many of the quarantine kennels that are outside the present code? They are no-go areas for animal welfare. There are cases of neglect and sometimes cruelty, leading to great suffering for the animals incarcerated there. Although my hon. Friend is, I am sure, planning for a major reform of our absurd, cruel and unnecessary quarantine system, will he give an assurance that the Animal Health (Amendment) Bill, which was presented to the House yesterday, will have the Government's full support when it is considered by the House again in November?

Mr. Morley: I was present in the House yesterday when my hon. Friend presented the Bill and I congratulate


him on his arguments on the serious issue of maintaining very high standards in quarantine kennels. At present, 74 quarantine kennels have signed up to the Ministry's voluntary code of practice; five have not. There are no powers at present to insist that they do sign up. We will look at the matter and we will examine my hon. Friend's Bill carefully when it is published to see whether we can use it as the basis of taking this issue forward.

Mr. Walter: Does the Parliamentary Secretary agree that a significant reduction in the problem of the welfare of animals in quarantine could be brought about by reducing the necessity for animals to go into quarantine? Do the Government have any plans to introduce new rules to allow animals coming in from the European Union and other rabies-free countries with the necessary veterinary certificates not to have to go into quarantine for the period at present required?

Mr. Morley: The Government's policy is to ensure that this country retains its rabies-free status; that is obviously very important. Having said that, we acknowledge there have been new advances in technology and new procedures. We committed ourselves, when in opposition, to a review of quarantine procedures. We have carried out that review and we propose to produce a consultation paper in the not-too-distant future on the various options that could be considered, ensuring that we maintain the rabies-free status of this country.

Common Agricultural Policy

Mr. Baker: To ask the Minister of Agriculture, Fisheries and Food what progress is being made towards securing reform of the common agricultural policy. [7282]

Dr. Jack Cunningham: I am delighted that the European Commission yesterday published proposals for common agricultural policy reform, which in most respects reflect the Government's own ideas and priorities.

Mr. Baker: Does the Minister agree that, although the announcements from the Commission are broadly welcomed by the agricultural sector and the wider environment, there is concern about the possibility of a cap on the proposed ceiling for direct payments to farmers? Will he undertake to resist any proposals for a cap on our farms, which are generally two or three times larger than those elsewhere in the European Union, as that would be detrimental to farmers in my constituency of Lewes and elsewhere in the country?

Dr. Cunningham: The hon. Gentleman is referring to what in Euro-jargon is called modulation. I can assure him, as I have told the House before, that I am opposed to the introduction of modulation in the CAP.

Mr. Lawrie Quinn: Will my right hon. Friend please outline how he intends to consult communities in peripheral rural areas such as the North York moors and his own constituency in Cumbria before the proposed reforms come into effect?

Dr. Cunningham: My hon. Friends the Minister of State and the Parliamentary Secretary and my noble

Friend in the other place are already involved in regional consultation on a regular basis, as are all right hon. and hon. Members. I can assure my hon. Friend that, having represented such a constituency for 27 years, I shall ensure that the voices of farmers in the hills, the dales and less-favoured areas are heard.

Mr. Alasdair Morgan: Given that the Government have already stated that the reform of the milk quota system is tied up with reform of the CAP, and as many dairy farmers are advising their sons and daughters not to follow them into the industry, but instead to enter the milk quota brokerage industry—assuming that they have also qualified as lawyers or accountants—will the Minister address the reform of the milk quota system as a matter of urgency so that young people are once again encouraged to join the industry?

Dr. Cunningham: The answer is yes. I favour the abolition of milk quotas, as that is the only realistic reform that should be on the agenda. I intend that that issue, among others, will be on the agenda during the United Kingdom presidency. In general, I support the points made by the hon. Gentleman.

Mr. Davidson: Does the Minister accept that the CAP has forced up food prices in Britain and elsewhere and represents a substantial transfer of resources from urban areas to rural areas? Why should the urban poor subsidise wealthy farmers? Would we not be much better off if the system were reformed so that prices were reduced substantially?

Dr. Cunningham: It is true that the rural poor as well as the urban poor have to pay high prices—sometimes even higher prices—for their food, so the CAP has been of disadvantage to British people generally. We all pay more than is necessary for our food. I can think of few, if any, other policies that cost £30 billion a year and infuriate the farmers and the consumers alike.

Mr. Paice: Although we welcome the reduction in price support contained in the proposals published yesterday—indeed, I welcome the remarks that the Minister has just made about them—does he agree that they would increase the cost of the CAP to the taxpayer by some £3.5 billion, yet at the same time reduce the income to arable farmers by some £330 million, in addition to the fact that cereal prices this year are already some 30 per cent. down on last year? Why should British farmers believe that the Minister will negotiate firmly on their behalf for proper compensation for further price reductions when he still refuses to commit himself to applying for the £350 million in compensation that is already on the table as a result of the revaluation programme.

Dr. Cunningham: The hon. Gentleman is right: the proposals—we are still examining them in detail—involve increases in expenditure. The Government have certainly not signed up automatically to that. I also recognise that, if we are to get away from support for production—that is our basic position—there will have to be transitional arrangements for farmers.
As for compensation to farmers, principally because of the movement in sterling, I can tell the hon. Gentleman and the House that I have an open mind on that subject. I have not made up my mind one way or the other.

Fishing

Mr. Mitchell: To ask the Minister of Agriculture, Fisheries and Food how he intends to balance (a) fishing capacity reduction and (b) effort limitation in reaching the targets set out in the multi-annual guidance programme. [7283]

Mr. Morley: My colleagues and I are discussing this with leaders of the fishing industry.

Mr. Mitchell: I hope that my hon. Friend agrees that the combination of effort and capacity targets is a bad idea because it makes it difficult to secure transparency and to know what is going on with regard to limitation of effort by our competitors. I hope that he further agrees that, given that the reductions demanded of us will be so massive, it will be impossible to reach them without substantial decommissioning funds from the Treasury to help the industry and without some kind of set-aside net-aside for tie-ups from Brussels. If we cannot reach such targets, we will have no access to European funding, which all our competitors have had and the British industry needs.

Mr. Morley: I know that my hon. Friend has been a long-standing campaigner on behalf of his constituents and the British fishing industry. I know that he understands, as we do in government, that part of the problem that the industry is facing is due to the failure of the previous Administration under MAGP III in making progress in effort reduction. The fact remains, however, that there is a serious problem with overcapacity, as my hon. Friend knows. We have to tackle that with the industry. We want to give the industry the widest options concerning effort control. There is of course also a case for decommissioning, for which we have some funds available—£12 million. As he knows, we are talking with the industry about the best way of using those funds and the various options available.

Bovine Spongiform Encephalopathy

Mr. Tony Colman: To ask the Minister of Agriculture, Fisheries and Food what he estimates to be the costs to date of BSE enforcement. [7284]

Mr. Rooker: The approximate cost of enforcement of BSE measures by the Meat Hygiene Service since its establishment in April 1995 until the end of March this year is a little more than £20 million. Obviously, there are no figures available for the current year. Details of any local authority enforcement costs are not held centrally. I should put the figures in context: BSE is costing the public this year £1.4 billion, and over a four-year period, £3.7 billion—not a penny of which has been planned for.

Mr. Colman: I thank my hon. Friend for his answer. Perhaps those relatively modest amounts spent on enforcement reflect the failure of the previous Government to deal with the matter and ensure the very highest level of personal and consumer safety.
I congratulate my hon. Friend on his actions on Tuesday in stopping operations at two meat plants, thus ensuring that the illegal export of beef cannot take place.

Does that reflect a much more hard-hitting approach under the new Labour Government to ensure that consumer safety is at the top of the list?

Mr. Rooker: I agree entirely with the first part of my hon. Friend's question. It is clear that the previous Government were slack in the extreme in enforcing BSE measures. That is why so little has been spent. The activities on Tuesday will be detailed in a further answer. We shall publish before the end of the year the hygiene assessment scores for every abattoir and slaughterhouse in the country. Frankly, anyone who continues to buy from any establishment that has a low score needs his head looking at.

Mr. Greenway: We cannot have it both ways. Earlier, the Minister of Agriculture, Fisheries and Food joined the hon. Member for City of York (Mr. Bayley) in paying tribute to the Meat Hygiene Service, which is based in York, and I join him in that. The Minister of State, however, appears to be saying that the standards of enforcement were not good. What is the truth? Should we be concerned not about the standards of enforcement in this country but—if the Minister's plan to ban beef imports from other European countries that do not meet the same hygiene standards is to have any meaning—about enforcement in abattoirs in other European countries?

Mr. Rooker: Let us get this clear. Staff in my Department have been carrying out the duties requested of them by previous Ministers. Previous Ministers were the ones who were slack. They deliberately sought not to enforce the regulations. Staff were required to follow those orders, which has left us having to close abattoirs at a few hours' notice. If there are any culprits in the matter, they are sitting on the Opposition Front Bench and the Benches behind. As the costs and consequences of the BSE legacy emerge and become apparent to present Ministers, we can see ever more clearly that the previous Government's handling of BSE amounted to nothing less than economic treason.

Mr. Campbell-Savours: My hon. Friend used the term "slack in the extreme". Will he make a statement, and place it in the Library, of what he found out about BSE when Labour took over the Government? From all reports, it sounds shocking.

Mr. Rooker: I assure my hon. Friend that we asked all the questions that would come immediately to mind. We are still awaiting some of the answers.

Mr. Swinney: In the light of the Minister's statements about the costs of BSE enforcement, it is obvious that there is cross-party enthusiasm to solve the matter as early as possible. Does he recognise the unease of the National Farmers Union for Scotland that the twin-track proposals announced by the Government suggest that one track may move faster than the other? Will he assure us that the twin-track approach will maintain the same pace for each aspect of the certified herds scheme and the date-based scheme?

Mr. Rooker: The hon. Gentleman's question goes somewhat wider than the original question. We are moving


as quickly as possible on several fronts to get the ban lifted. It is not just a question of BSE enforcement, because the Florence agreement contains many other impositions and requirements. We hope to make an early announcement on progress on those requirements and we will seek to move forward on a United Kingdom basis wherever possible.

Organic Farming

Mr. Corbyn: To ask the Minister of Agriculture, Fisheries and Food what plans he has to increase support for organic farming. [7285]

Mr. Morley: We have already made it clear that we want to encourage an expansion of organic production and we are considering the best ways of achieving that.

Mr. Corbyn: Does my hon. Friend recognise that many organic farmers have a sense of grievance? They feel that they are discriminated against by the Department and are forced to charge higher prices for their products because their concern for conservation of the soil and the natural environment in which they work is such that they are unable to use the high-growth fertilisers and pesticides that other farmers use. They feel that the pricing system militates against them. Will my hon. Friend ensure that that sense of grievance is dealt with and that they are treated on a par with organic farmers in other parts of the European Union?

Mr. Morley: Yesterday, the Government responded formally to the Select Committee on Agriculture, which made recommendations on organic farming. This morning, at the Agri-Environment Forum, I had the opportunity to discuss the issue with Patrick Holden of the Soil Association, who made a powerful case for more support. The Government want to see more organic conversion. The present structures have caused problems for farmers wishing to convert and we are reviewing them. Demand for organic produce is so strong that we are importing produce, but we wish to see British farmers meeting the demand with organic produce.

Beef Exports

Mrs. Anne Campbell: To ask the Minister of Agriculture, Fisheries and Food what steps he is taking to prevent illegal beef exports. [7287]

Dr. Jack Cunningham: All allegations are urgently and rigorously investigated. My hon. Friend will be aware that as a result of serious hygiene concerns arising from investigations into such allegations, my Department and I issued notices on 14 July preventing two meat plants in the United Kingdom from trading in beef.

Mrs. Campbell: I thank my right hon. Friend for that reply. Is he aware that farmers in my area are concerned about any illegal activity, which can only help delay the lifting of the ban on British beef exports? Is he further aware of how welcome his prompt and firm action has been to local farmers?

Dr. Cunningham: Overwhelmingly, farmers and legitimate and responsible meat traders will be infuriated by the allegations that British meat companies have been

involved in a European Union-wide fraud, especially as the European Union ban on British beef came into effect in March 1996. I draw the attention of my hon. Friend, her constituents and the House to the fact that by 1 May this year no new legislation had been enacted in the United Kingdom to place the ban on a statutory footing. I intend to introduce new legislation shortly to clarify and strengthen my powers to deal with suspected illegal exports and to enhance the checks that are carried out at ports.

Mr. Gray: Does the Minister accept that the only way to ensure the same high standards in beef imported from continental abattoirs as we have come to expect from our own abattoirs would be to undertake to send our meat hygiene inspectors or our rigorous MAFF vets to inspect the abattoirs on the continent from which we are to import? Will he raise that idea with his ministerial colleagues next week and undertake to say that we will not import European beef unless it comes from abattoirs as demonstrably fine as our own?

Dr. Cunningham: That is an absurd proposition. I have no such powers to send my meat inspectors into meat plants in other countries. As the hon. Gentleman knows, the European Union has its own inspectorate for such purposes.

Bovine Spongiform Encephalopathy

Mr. Rendel: To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the administration and financing of the over-30-months slaughter scheme.[7289]

Mr. Chope: To ask the Minister of Agriculture, Fisheries and Food what representations he has received about his decision to reduce compensation payments to beef farmers with effect from 4 August. [7290]

Dr. Jack Cunningham: I have received a number of representations from farming interests about the decision to reduce the compensation payment for cull cows slaughtered under the scheme and to cap compensation payments by introducing a weight limit of 560 kg. The over-30-months scheme is administered by the Intervention Board executive agency and is co-financed by the European Union.

Mr. Rendel: When the Minister was replying to my hon. Friend the Member for Somerton and Frome (Mr. Heath), he said that he saw no crisis brewing in the scheme. Does he not realise that many farmers, in my constituency and throughout the country, would regard that as remarkably complacent—perhaps even as complacent as the attitude of the previous Administration? Although the halving of the number of abattoirs and the reduction in compensation to farmers may lead to some reduction in costs for the taxpayer, it will certainly mean an increase in costs to farmers and more distress for the animals involved because of the longer distances that they will need to be transported.

Dr. Cunningham: I made the point earlier, and I make it again to the hon. Gentleman now, that the Intervention Board has introduced competitive tendering precisely so


that we can improve value for money for British taxpayers. I also repeat that, as my hon. Friend the Minister of State said, United Kingdom expenditure on all BSE-related measures is forecast to be more than £1.35 billion in 1996–97, and is budgeted at more than £3.5 billion for the entire period 1996 to 2000. We simply cannot go on spending money at that rate. We have to take due account of the horrendous cost of it all to the taxpayer. I invite the hon. Gentleman, and anyone else who supports his argument, to think what we could do in the health service or in our children's schools with that expenditure.

Mr. Chope: Why is the Minister discriminating against the farmers with the fattest old cows? What message does he have for my constituent Mr. Farwell, who has a herd of fine Friesians and is extremely aggrieved by the 560 kg limit? A fine Friesian that has become barren will probably weigh 700 kg, so my constituent will lose a lot of money as a result of the arbitrary change.

Dr. Cunningham: I recognise that farmers, too, have difficulties as a result of the mismanagement of the whole crisis by the party of which the hon. Gentleman is a member. Perhaps I should remind him that the scheme is subject to EU legislation and is not completely within the control of Her Majesty's Government. Decisions have to be approved by the Beef Management Committee in Brussels, precisely because of the mess created by the Conservatives.

Mr. Stevenson: Does my right hon. Friend agree that one of the basic principles of the over-30-months scheme was that the reductions announced in the compensation have been part of the plan all along? Was not one of the guiding principles that farmers and producers would have the time to plan ahead? They knew full well that the time was coming when the compensation would be reduced and measures such as those that my right hon. Friend has announced would have to be adopted.

Dr. Cunningham: Yes, I agree with that. I should also point out that there is absolutely no reason, given the time that has elapsed, why any clean cattle should continue to go into the scheme

Mr. Tipping: Will the Minister look closely at any arguments or suggestions from farmers' organisations or other bodies trying to meet the needs of beef and suckler farmers, provided that any further action is met within existing resources?

Dr. Cunningham: Yes. I met the president of the National Farmers Union and a representative group of farmers from all over the United Kingdom a couple of weeks ago. They said that they would put some counter-proposals to me on how the scheme might be administered. I said that I would consider any such proposals that were put to me. As yet, I have not received them.

Mr. Thompson: Will the Minister confirm that it was pressure from the Treasury that led the British Government to make this request to the Beef Management Committee and that that request was to reduce the price

not by 0.1 ecu per kilogram but by 0.3 ecu per kilogram? Will the right hon. Gentleman assure us that no further such request will be made?

Dr. Cunningham: The Ministry of Agriculture is not immune to the need to stick within budgeted public expenditure—any more than any other Government Ministry is. A number of proposals were put to the Beef Management Committee in Brussels, and the final decision was made there. That is a consequence of the European Union legislation to deal with the crisis in beef farming caused by the previous Administration.

Oral Answers to Questions — ATTORNEY-GENERAL

Serious Fraud Office

Mr. Bernard Jenkin: To ask the Attorney—General what discussions he has had since 1 May with the director of the Serious Fraud Office concerning the future of the office. [7305]

The Attorney-General (Mr. John Morris): The director and I meet regularly to discuss matters of departmental interest. In 1996–97 the Serious Fraud Office had a highly successful year. Eight major cases were concluded, with 12 out of 14 defendants being convicted. The new director will continue to build on that foundation.

Mr. Jenkin: Do the Government have a strategy to rebuild the reputation of the Serious Fraud Office after it foundered on a series of high-profile cases during the past decade and earlier in this decade? May we have some idea of the kind of reforms that the right hon. and learned Gentleman would consider?

The Attorney-General: The figures that I have just given the House speak for themselves. There have been difficulties in the past, but the hon. Gentleman will be aware that many of the cases with which the SFO has to deal are difficult and complex and need a great deal of investigation. Once they are prosecuted, of course, the SFO is in the hands of the courts. However, the hon. Gentleman should be reassured by the figures that I have given.

Amsterdam Treaty

Mr. Gareth Thomas: To ask the Attorney—General if he will make a statement as to the implications of the Amsterdam treaty for his Department. [7307]

The Attorney-General: The Amsterdam treaty does not have any specific implications for the work of my Department, but as a member of the Government I welcome the outstanding achievement of my colleagues in securing such a treaty which meets our key objectives.

Mr. Thomas: I am grateful to my right hon. and learned Friend for that reply. Does he agree that a strong and effective European Court of Justice is essential if this country is to gain the maximum advantage from


membership of the European Union and essential to the interests of British industry if it is to take advantage of the single market?

The Attorney-General: My hon. Friend is absolutely right. A strong European Court of Justice is essential if we are to ensure compliance with the rules of Community law, such as the rules governing the internal market. As my hon. Friend says, the overwhelming majority of those rules benefit us—so I endorse his views.

Mr. Burnett: Can the provisions of the Amsterdam treaty be used to enable United Kingdom judgments more easily to be enforced in other European Union countries?

The Attorney-General: As the hon. Gentleman will have heard, I made my Department's responsibilities quite clear in my main answer, and the implications are as I have said. I could tell him what objectives we achieved, but the details of the treaty are matters for my right hon. Friend the Foreign Secretary and I would respectfully suggest that the hon. Gentleman puts the question to him.

Crown Prosecution Service

Mr. John M. Taylor: To ask the Attorney-General if he will make a statement on the effect of restrictions on rights of audience on morale in the Crown Prosecution Service. [7308]

The Attorney-General: The Crown Prosecution Service has no statistical information about this issue, but there is enthusiasm among Crown prosecutors to exercise rights of audience in the Crown court.

Mr. Taylor: Does the right hon. and learned Gentleman agree that morale in the Crown Prosecution Service is extremely important, and that it is a matter not only of resources but of career prospects, which include the possibility of appearing in the higher courts? Does he further agree that until the service is in good heart there is no point in contemplating a public defender system?

The Attorney-General: I know of the hon. Gentleman's great interest in these matters, and on the first part of the question I agree entirely: the morale is vital. On the second part, the review that we have set up has been warmly welcomed. Given that welcome, I hope that when the results come out, the review will play a major part in the question of morale that the hon. Gentleman rightly raises. The question of rights of audience and employed solicitors has already been decided, and it was clarified as recently as April this year. The question of employed banisters has not been resolved: it is before the designated judges for consideration, and has been for a little time.

Mr. Mackinlay: To ask the Attorney-General when he expects to introduce measures to reform the Crown Prosecution Service. [7309]

The Attorney-General: In addition to the restructuring of Crown Prosecution Service areas to correspond with police areas, which 1 announced on 21 May 1997, Sir Iain Glidewell has been appointed to conduct an independent review of the CPS and expects to report to me by the end

of the year. Further consideration will then be given to whether and what changes are necessary to provide for the more effective and efficient prosecution of crime through local public prosecutors.

Mr. Mackinlay: Does my right hon. and learned Friend realise that, although it is quite fair for the morale of the Crown Prosecution Service to be referred to by the Tory hon. Member for Solihull (Mr. Taylor), it is far more important to consider the morale of our constituents, who are sick to the back teeth of having court cases delayed by the old existing service, over which the Tories presided? We want news of when Mr. Justice Glidewell's report will be published. Will the public be able to make representations? The people of this country want my right hon. and learned Friend to take a grip on the service, which is badly letting down the criminal justice system.

The Attorney-General: My hon. Friend is absolutely right that the paramount consideration must be the British public as a whole; I endorse that view. I hope that Sir Iain Glidewell's report will be published by the end of the year. The public will be invited to make their representations. In the years that have gone by, I have been aware of the feelings of many Members of Parliament and many petitioners about the Crown Prosecution Service.
I hope that hon. Members such as my hon. Friend and others will give their evidence to Sir Iain Glidewell, who will issue a general invitation to staff and to anyone else to come along and give their views on what they regard as the shortfalls. Matters such as downgrading, delays and discontinuances are specifically within Sir Iain's remit.

Mr. Baker: Is the Attorney-General aware that many of my constituents feel that the barrier set by the CPS before it decides to initiate prosecutions is set absurdly high and that on some occasions it appears that the reason is a backlog in the courts rather than a decision as to whether an action will be successful? Is he also aware that for many minor offences it appears to be almost impossible for the CPS to initiate proceedings and, for matters such as vandalism, only in exceptional circumstances does an action proceed?

The Attorney-General: Those are some of the matters of concern to which my hon. Friend the Member for Thurrock (Mr. Mackinlay) referred. Those matters will come within the remit of Sir Iain Glidewell. At the end of the day, we want to ensure that those who are guilty of offences are successfully prosecuted. The CPS has to take an independent judgment on the chances of conviction in each case, and that is what it does. If there are any shortfalls, they will be examined by Sir Iain and his inquiry.

Sir Nicholas Lyell: Does the Attorney-General recognise that we welcome Sir Iain Glidewell's review, but is he also aware that those who sow the wind reap the whirlwind? Does he recall that he and, in particular, his right hon. Friend the Home Secretary went up and down the country prior to the election putting out the idea that the CPS was constantly dropping or downgrading cases wrongly? They went on to say that the CPS rather than the police should have the job of informing victims, but the present Government have put no money forward to


enable that to happen and have therefore found it necessary to set up Sir Iain Glidewell's inquiry. Two of its primary functions are, first, to find out whether what he and the Home Secretary were saying is even accurate and, secondly, to find out whether what they are proposing is even practicable. Will he assure the House that the report—when it comes—will be published in full?

The Attorney-General: I can assure the right hon. and learned Gentleman that the report will be published in full. If he had not shut his eyes over the years to the grave concern expressed by judge after judge, prosecutor after prosecutor and by Members of this House and members of the public, something would have been done years ago. He may recall that when the Bill which became the Prosecution of Offences Act 1985 was first introduced I moved an amendment and said that the issue should be reviewed in five years' time lest we might—all of us—have got it wrong. I do not think that we got it right. Hence, I immediately asked for 42 Crown prosecutors to be appointed in each area, to be coterminous with chief constables, so that the public would know where they stand.

Lenient Sentences

Mr. Chope: To ask the Attorney-General how many unduly lenient sentences he has referred to the Court of Appeal since 1 May. [7310]

The Attorney-General: Since 1 May this year, the Solicitor-General and I have considered 27 sentences. I have applied to the Court of Appeal for leave to refer 11 of those sentences.

Mr. Chope: I thank the Attorney-General for that reply. Is he aware how angry people are at the Government's failure to make up their mind whether to implement mandatory minimum sentences, which are on the statute book just awaiting a Government decision? Is he aware that many persistent burglars on their seventh conviction are not even being sent to prison? Will he ensure that where there is such leniency the cases are referred by him to the Court of Appeal, pending a decision by the Home Secretary as to whether to implement the legislation?

The Attorney-General: Only a very small proportion of cases have been referred to me or to my predecessor

compared with the huge number tried. The other matters that the hon. Gentleman raises are for my right hon. Friend the Home Secretary.

Mr. Beith: Does the Attorney-General realise that if he were successful in securing longer sentences for the number of people that the hon. Member for Christchurch (Mr. Chope) would like, and still more if he went for mandatory sentences, there would be nowhere to put the prisoners? Does he regret that the Home Secretary engaged in the general hue and cry for mandatory sentences before the general election and now has to face the consequences of no financial provision having been made for the extra prison places required?

The Attorney-General: The concern of my right hon. Friend the Home Secretary, which I am sure is shared by the right hon. Gentleman, is with the rising rate of crime, which has continued year after year, and the Conservative party's failure to deal with it. That was the basis of his remarks and of his continuing concern. We want to ensure that more of those who are guilty are convicted by the courts.

Mr. Hogg: May I put it to the Attorney-General that his answer is worrying because the numbers being referred to him and to the Court of Appeal are very small? Those of us who have represented constituencies for a long time, or who have appeared in courts, know that sentences are frequently unduly lenient. It would be more reassuring if he could tell the House that he would endeavour to do a bigger trawl and consider a greater number of cases so as to get a better benchmark for the Court of Appeal.

The Attorney-General: I assure the right hon. and learned Gentleman that I and the Solicitor-General consider personally each and every case, as under my predecessor. Cases are referred to me by Members of Parliament, the Crown Prosecution Service, or the general public. The pattern seems fairly consistent. In 1997, 32 cases were referred to my predecessor. In the previous year, in England and Wales, there were 68, and in the year before that, there were 77. The cases that in accordance with statute we have to refer are not those that the right hon. and learned Gentleman or I might feel to be lenient but those that are unduly lenient—that is, where a sentence occurs well outside the usual pattern of sentencing. The statute was passed by his party, and we have to operate it.

Business of the House

Mrs. Gillian Shephard: May I ask the Leader of the House to tell the House the business for next week?

The President of the Council and Leader of the House of Commons (Mrs. Ann Taylor): The business for next week will be as follows.
MONDAY 21 JULY—Second Reading of the Education (Student Loans) Bill.
TUESDAY 22 JULY—Second Reading of the Social Security Bill.
WEDNESDAY 23 JULY—Until 2 pm, there will be debates on the motion for the Adjournment of the House.
In the afternoon, there will be a debate on the motion on section 5 of the European Communities (Amendment) Act.
Proceedings on the Ministerial and Other Salaries Bill.
THURSDAY 24 JULY—Consideration of any Lords amendments which may be received to the Education (Schools) Bill.
Proceedings on the Law Officers Bill [Lords].
FRIDAY 25 JULY—Debate on the White Paper on the Welsh referendum on a motion for the Adjournment of the House.
MONDAY 28 JULY—Progress on remaining stages of the Finance Bill, which will be brought to a conclusion on Tuesday 29 July.
The House will also wish to know that on Wednesday 23 July there will be a debate on the preliminary draft budget for 1998 in European Standing Committee B.
As this is the first European Standing Committee meeting of this Parliament, I should like to take the opportunity to remind the House, particularly for the benefit of new Members, that all Members may attend European Standing Committees, and participate in questions to the Minister and the debates that follow.
Details of the relevant documents will be given in the Official Report.
[Wednesday 23 July—European Standing Committee B. Relevant European Community Document: COM(97)280, Preliminary Draft Budget. Relevant European Legislation Committee Report: HC 155-i (1997–98).]

Mrs. Shephard: I thank the right hon. Lady for her statement. She will be aware that the United Kingdom's contribution to the European Union budget is due to rise to more than £8 billion compared with the present level of £6.3 billion—a rise of 27 per cent. She has explained that a debate on that issue will take place in European Standing Committee B, but I should have thought that, in the light of the size of that rise and of the fact that the Government have already spent most of the reserve, it would be better for there to be a full debate on the Floor of the House. I hope, therefore, that she will rethink her plans.
The House will have noticed that the right hon. Lady announced that the debate on the White Paper on devolution for Wales is due to take place next Friday. Given that much of next week's business is

uncontroversial, I wonder whether the right hon. Lady would also reconsider that plan. The devolution issue is important enough to take place earlier in the week.
Given yet another evasive performance by the Secretary of State for Wales at the Dispatch Box yesterday during Welsh questions, when he failed three times to answer questions on whether he had threatened the hon. Member for Blaenau Gwent (Mr. Smith) with expulsion from the Labour party, will the right hon. Lady ensure that, before the debate on the White Paper, the Secretary of State for Wales is given some basic training on answering questions? Does the right hon. Lady intend to have statements next week on the White Papers on devolution to Scotland and Wales?
It is disappointing to have to remind the right hon. Lady again that her responsibility is to the whole House. Does she agree that it is unacceptable and a discourtesy to the House for the Government, having raised questions and speculation about their pensions policy through briefing and counter-briefing the press, and having arranged for it to be vaunted as the most massive ever statement on pensions policy, then to deny the House the opportunity of hearing the answers to the questions that the Government themselves raised by announcing yet another review in a written answer?
In that connection, in the interest of open government, will the right hon. Lady explain why the Government have delayed their White Paper on open government?
Finally, will the right hon. Lady arrange for a debate on the cost of redecorating the Lord Chancellor's personal accommodation, in order to explain why that former fat cat needs, at taxpayers' expense, so lavishly refurbished a basket?

Mrs. Taylor: May I deal first with the point that the right hon. Member for South-West Norfolk (Mrs. Shephard) raised in respect of next Wednesday's debate on the draft budget? I remind her that we are following the practice adopted by the previous Government in the past two years; the debate has taken place in a European Standing Committee. It has taken some work to ensure that the Committee was set up in time, so the right hon. Lady should be congratulating us, not carping.
On Friday's debate on the Welsh White Paper, I remind the right hon. Lady that Friday is a normal sitting day. Hon. Members who are interested will participate in the debate. No votes are envisaged. Friday is an appropriate day for that debate, not least because we shall publish the White Paper on our proposals for Welsh devolution on Tuesday. Had we had a debate earlier in the week, the Opposition would have complained that we were not leaving sufficient time between publication of the White Paper and the debate. The Welsh White Paper will be published on Tuesday and the Scottish White Paper will be published on Thursday. Both will be accompanied by statements in the House.
The right hon. Lady raised the question of pensions. Having listened to some of the debates during consideration of the Finance Bill in the past couple of days, I am surprised that Opposition Members are still raising the pensions issue, because they certainly made no impact whatsoever in terms of that issue.
The fact that we were going to have a review on pensions has been well known for a very long time. All that has happened today is that the details of the terms of


reference have been announced. As for the time scale, hon. Members ought to realise that there will be plenty of time for consultation, because the Government intend to publish an initial framework for change in the first part of 1998 and there will then be a further period of consultation before firm proposals are developed. I think that there is plenty of time to discuss that.
On the issue of freedom of information, we have made it clear that there will be a White Paper and we want it to be comprehensive, so we are doing the extra work to make sure that that is the case.
On the issue of the Lord Chancellor's room in another place, it is, of course, for another place to decide what sums are spent on that part of this Palace. My right hon. and learned Friend the Lord Chancellor cannot himself direct that any work should be carried out, and it is certainly not a matter for this House.

Mr. David Winnick: As this is my first opportunity to ask my right hon. Friend the Leader of the House a question regarding the future of radio reporting of the House, can she tell me whether she has seen early-day motion 246?
[That this House deplores any attempt by the British Broadcasting Corporation to alter or remove Yesterday in Parliament from its usual format or slot on Radio 4; and congratulates its producers on the past 50 years of impartial, succinct, judicious, informative and wide-ranging assessment of proceedings in both Houses.]
What representations—I hope that there will be representations from the Government—will be made to the BBC on this matter? Will there be consultation between the Government and the leaders of other political parties represented in the House? Does my right hon. Friend agree that the BBC should be told, clearly and firmly, that what it intends to do is totally inappropriate and that we expect a different standard from a public service organization?

Mrs. Taylor: Madam Speaker, I think at you made it clear that you would be making inquiries and representations on that point.

Madam Speaker: I have already done so.

Mrs. Taylor: You tell us now that you have already done so. I, too, have been in touch with Radio 4 and I do not think that any changes are planned for the absolutely immediate future. I hope that that will allow those hon. Members who share the concern that has been expressed to make their views known to Radio 4. We all have an interest in making sure that there is sufficient serious reporting of parliamentary activities.

Mr. Andrew Stunell: Does the Leader of the House remember telling us that she hoped to provide a programme looking a fortnight ahead? May I remind her that she has just tantalised us by giving us the business for Monday and Tuesday in the final week? Could she break her duck and go for the second week now, so as to give us some advance warning? Could she even tell us when she expects us to come back after taking our break? [Interruption.] I am keen to get back.
If the Leader of the House were able to go into that further business, would she agree that we need an urgent debate on our prisons, bearing in mind the report issued

this morning by the chief inspector of prisons, which is highly critical of the situation in women's prisons in this country? Does she agree that such a debate would give the Home Secretary an opportunity to explain his U-turn in prison sentencing policy from before the election, when he was in favour of mandatory sentences to be imposed automatically, to the current state of play, where he is seeking for those to be discretionary and short?

Mrs. Taylor: I hope that, once we get past the early days of this Parliament, it will be possible to plan ahead on a slightly more secure basis than at present and that it will become normal practice to announce business two weeks in advance. At the moment, some of our business is still dependent on what is happening in another place and I would not like to give the House any misleading information.
However, I can confirm that I still hope and expect that the House will rise on 31 July. I am glad that the hon. Gentleman is keen to return after the summer recess. I hope next week to announce not only the date of return, but the details of business for the first week back. Those are, however, not yet finalized.
Important issues are looming regarding the prison population, which greatly concern the Home Secretary. They are very serious issues on which we should try not to score party political points. We must all try to solve the real problems that we have inherited and those that have resulted from the high incidence of crime in this country.

Mr. Harry Barnes: This Government believe in reviews. The previous Government also believed in reviews, but they were not good at conducting them. For example, their review of probate services resulted in proposals to close many services, including the one in Chesterfield, whose closure would create access problems in the area. May we have a debate about probate services so that Members of Parliament representing Derbyshire constituencies may have an opportunity to argue the case for the probate service in Chesterfield and perhaps save it in the same way that we helped to save the independent tribunal service?

Mrs. Taylor: I congratulate my hon. Friend on his previous victory. The proposals for the probate service to which he refers have been in the pipeline for some time. I cannot offer him the prospect of an early debate, but I shall bring the matter and the concerns of my hon. Friend and his constituents to the attention of my right hon. and learned Friend the Lord Chancellor as soon as possible.

Mr. Richard Shepherd: Given the importance to the House of the Select Committee on Modernisation of the House of Commons and its work, will the Leader of the House make a statement some time next week about why its proceedings are conducted in secret?

Mrs. Taylor: They are held in secret because that is what the House decided. However, I do not believe that they should be described in that way because we are simply deliberating in private. If we decided to take evidence, we could do so in public.

Mr. Harry Cohen: May I ask my right hon. Friend for a debate on London government?


The Conservative party has apparently done a U-turn and, less than two months after flatly rejecting the proposal, now supports Labour's policy of a directly elected mayor for London. Perhaps the debate would encourage the Opposition to go all the way in endorsing democracy for Londoners by accepting a London-wide elected authority.

Mrs. Taylor: My hon. Friend is right, and we welcome the Conservatives' U-turn. It is good that they have recognised that they were wrong to deny Londoners the right to their own democratic voice. It is somewhat ironic that the party that abolished the GLC 11 years ago should recognise belatedly the value of our policies. However, I am not sure that we can debate the matter next week.

Mr. Edward Leigh: As the Government embark on the 38th review of this short Parliament, will the Leader of the House explain why such detailed reportage about the Government's proposed pension reforms appears in today's newspapers, but the Secretary of State has not seen fit to come to the House and provide any explanation of her plans?

Mrs. Taylor: I have dealt with that matter already. There has been much speculation because we have made it clear for some time that there would be a review. The details and the terms of reference of that review were announced today.

Mr. Robin Corbett: Will the Leader of the House confirm that the Government intend to publish their White Paper on openness in government and freedom of information no later than 31 July? Consideration of the matter has been overdue for many years.

Mrs. Taylor: As I said earlier, the White Paper will be published, but not according to that time scale. It will be published later in the year.

Mrs. Theresa May: Will the Leader of the House make time available before the recess for a debate about the electoral system to be used at the next elections to the European Parliament, given reports that the Government have decided that the elections will take place using proportional representation and party lists? A debate would enable all hon. Members to express their genuine concerns about PR and, particularly, the use of the party list system—which leads to the election of Members who have no connection with constituencies and who, because they owe their election to the party hierarchy, owe their allegiance to the interests of that hierarchy rather than to their constituents.

Mrs. Taylor: I do not think that there is any prospect of a debate in the near future, although, of course, the Government have a manifesto commitment to PR for European elections.

Mr. Bill O'Brien: Will my right hon. Friend consider holding an urgent debate on the coal industry? Is she aware of the press reports highlighting the unfairness of the subsidies to the continental coal industry—Germany and Poland—which is contrary to the

agreement on the single market, and the effect of that on British miners' jobs? Is she further aware that the clean-coal exercise could be a threat to the jobs of British mineworkers, because the previous Government withdrew support for that exercise? Will my right hon. Friend allow us an early debate on the coal industry, as there has not been such a debate for the past four or five years?

Mrs. Taylor: I understand why my hon. Friend, with his background and constituency interests, is particularly worried about the situation. I cannot promise him a debate, but I will bring his representations to the attention of my right hon. Friend.

Mr. David Tredinnick: Is the Leader of the House aware of the number of statutory instruments arising out of European legislation that are coming before the Joint Committee on Statutory Instruments, and would she favour a review of the number and implementation of those statutory instruments? Does she think that that is a proper matter to be considered by the Select Committee on Modernisation of the House of Commons?

Mrs. Taylor: The answer is yes on both counts.

Mr. Paul Flynn: When can we debate early-day motion 1?
[That this House celebrates with joy and hope the election of what will be a great reforming Labour Government; applauds its manifesto declaration that 'all pensioners should share fairly in the increasing prosperity of the nation'; asserts that this can be achieved for the present generation of pensioners only by restoring the link between basic pensions and average earning; urges an immediate start to the promised manifesto review of 'all aspects of the basic pension and its value, second pensions including SERPS and community care' and a renewal of the commitment to retain SERPS.]
May we also debate today's welcome announcement on pensions, so that we can congratulate the Government on abandoning the foolish proposal by the previous Government to throw pensioners to the wolves of the private pensions industry? The Labour Government propose to rebuild pensions on one of Labour's great successes, SERPS, and to introduce a form of SERPS that will be funded, independent of the national insurance scheme and run by independent managers. Is not such a scheme, with administration charges of less than 2 per cent., preferable to the private schemes, which have charges of at least 25 per cent.

Mrs. Taylor: My hon. Friend's points are well made. I cannot promise him a debate, any more than I could promise a debate to other hon. Members, but I remind him that he can make those points directly to my right hon. Friend the Secretary of State for Social Security at Social Security Question Time on 28 July.

Mr. Gerald Howarth: Will the Leader of the House reconsider her decision on a debate on pensions? We heard an announcement today not of a review but, according to the newspapers, of far-reaching proposals, one of which is described by The Times as a tacit admission that the state can no longer fund people's pensions. That is a matter of great seriousness to the entire House, and it is not acceptable that the Secretary of State should make the announcement outside, rather than here.
Is the Leader of the House further aware that the Under-Secretary of State for the Home Department, the hon. Member for Knowsley, North and Sefton, East (Mr. Howarth), my namesake, has apparently, according to the news agency tapes, made an announcement today on new initiatives to curb the sale of alcohol to young people? That is a matter of interest not just to Conservative Members, but to the entire House, and she should regard her position as being one of service to the entire House.

Mrs. Taylor: I am glad that the hon. Gentleman believes that the Government are making so much progress on so many issues. Were we always to make every announcement to the House, we would never do anything other than listen to statements, because we have a very proactive Government. When there is a statement of particular significance to the House, we make sure that it is made in the House.

Mr. Rhodri Morgan: Following the heart-warming reports in The Mirror this morning that Ryan Giggs, a constituent of mine until he had to travel north to Manchester to make his living, is very much in favour of the Government's proposals for a Welsh Assembly, will my right hon. Friend ensure that in next week's debate on the White Paper on the Government's democratic devolution proposals, the Government make it clear that they welcome support from left-wingers, right-wingers, creative midfield controllers and even the occasional striker—as Mr. Giggs is, all rolled into one?

Mrs. Taylor: I look forward to my hon. Friend's contribution to that debate.

Mr. John Bercow: May we have a statement to the House next week from the President of the Board of Trade in which she explains, once and for all, when she first knew that the Minister for Trade and Competitiveness in Europe held shares in BP and in other companies, and why—in answer to questions from, and in correspondence with, my right hon. Friend the Member for Wokingham (Mr. Redwood)—she said that the Minister for Trade and Competitiveness in Europe "has placed" the generality of his shareholdings in a blind trust, when it subsequently emerged that he had not, and still has not, done so?

Mrs. Taylor: We cannot find time to debate that matter next week, and I do not think that there is any need to debate it. On 3 July, during business questions, I told the House:
My noble Friend the Minister for Trade and Competitiveness in Europe is in the process of complying with the rules in 'Questions of Procedure for Ministers'."—[Official Report, 3 July 1997; Vol. 297, c. 427.]
That was an accurate statement.

Mr. Andrew Mackinlay: As an Essex Member who has long been an advocate of devolution—even before it was fashionable in the Labour party and elsewhere—may I ask my right hon. Friend to use her good offices to impress on the House that, although a Welsh Assembly and Scottish Parliament are a primary concern for our colleagues from Wales and Scotland, devolution is a United Kingdom issue? Assuming that

Madam Speaker feels so inclined, all hon. Members should have an opportunity to speak in debates on devolution White Papers, on the legislation and in the Committee stages. I stress that I am raising the matter as someone who is a keen advocate of devolution—both for those nations and for other areas in the United Kingdom. We must all have a slice of the action of the debate on those very important constitutional issues.

Mrs. Taylor: I am sure that many hon. Members from English constituencies will participate in those debates, not least because Conservative Members do not represent Scottish or Welsh constituencies.

Mr. John Greenway: In reply to my hon. Friend the Member for Aldershot (Mr. Howarth), the right hon. Lady said that any matter that was of significant interest to the House would be announced in the House. Surely nothing can be of greater interest to the House than the decision to give the responsibility to set interest rates to the Bank of England, and nothing can be more important than such a serious change in electoral arrangements as using proportional representation for elections to the European Parliament. We have read in the newspapers that the latter matter has already been decided. Will she give the House categorical assurances not only that there will be a statement before that policy is likely to be enshrined in United Kingdom law but that the House will have an opportunity to debate what should be a bipartisan matter?

Mrs. Taylor: I said that the most significant statements would be made in the House. Both the specific policies mentioned by the hon. Gentleman were mentioned in the Labour party manifesto, on which the Government were elected.

Mr. John Cryer: May I press my right hon. Friend on the point of proportional representation? Many Labour Members, myself included, are in favour of the first-past-the-post system, and moves towards proportional representation in the European or any other elections would be a matter of some concern. Will she take our concern on board and allow a debate on the matter—perhaps during the first week of August, if we run out of time?

Mrs. Taylor: In due course, there will be debates on those issues, but the Bill has not yet been drafted. I remind my hon. Friend that all Labour Members were elected on a manifesto containing a commitment to proportional representation for European elections.

Mr. Edward Garnier: When do the Government intend to announce their detailed proposals on the introduction of the European convention on human rights? May we have a statement next week, or certainly before we go down at the end of July?

Mrs. Taylor: We are making progress on that matter and still intend to introduce legislation. I hope that announcements will be made before too long. We are, however, not yet in a position to make a statement.

Mr. Peter Luff: In the light of the disappointing replies given by the Minister of


Agriculture, Fisheries and Food earlier, could the right hon. Lady arrange for an early debate on the changes to the over-30 months scheme, which are being so arbitrarily implemented, and, in particular, on what consultation the right hon. Gentleman had with the parties that will be affected and what assessment he made of the impact of these unwelcome changes on producers?

Mrs. Taylor: I do not think that there is either time or need for such a debate. My right hon. Friend and his ministerial colleagues are dealing with the matter as well as they can. It is a very difficult situation, not least because of what we inherited from the previous Government. My right hon. Friend dealt with the matter at Question Time, and I have nothing to add to what he said.

Mr. Tony Baldry: Perhaps the right hon. Lady will read in Hansard tomorrow the answers that she has given today, because she has set out some interesting new constitutional conventions, not least that if there is a manifesto commitment, there is no need or obligation to make a statement to the House. It used to be a constitutional convention, until 1 May, that if the Government changed their policy, they made it clear to the House either by way of written answer or, if the matter was more significant, by way of a statement.
This afternoon, we have heard a whole series of policy changes, not least that relating to pensions, which the Government have not had the courtesy to explain to the House. This is not modernisation; it is arrogance of power of the most unattractive kind.

Mrs. Taylor: Conservative Members would have been very critical if we had gone back on manifesto commitments, and so would the country as a whole. There has been no change in this Government's policy on some of the matters to which the hon. Gentleman refers. The fact that we disagree with the previous Government on a range of issues does not mean that we have to explain why.

Mr. James Clappison: In reply to my hon. Friend the Member for Buckingham (Mr. Bercow), the Leader of the House said that she took the trouble on 3 July to tell the House that the Minister for Trade and Competitiveness in Europe was in the process of complying with the requirements affecting him as a Minister regarding shareholdings. Has he now done so?

Mrs. Taylor: If the Permanent Secretary and the Cabinet Secretary are satisfied with the arrangements that have been made, I do not think there is any need to take the matter further.

Mr. Nick St. Aubyn: May we have an urgent statement by the Financial Secretary to the Treasury in view of the fact that, during last night's debate on clause 17 of the Finance Bill, she, no doubt unintentionally, misled the House? The effects of clause 17 on some important classes of insurance premium payers, of whom there are certainly tens of thousands, and possibly hundreds of thousands, will be dramatic. It was clear that Conservative Members were very worried, but, towards the end of that debate, the Financial Secretary assured us that the answers to our questions would be

found in the notes from the Inland Revenue. We have checked those notes, but there is absolutely nothing in them to clarify the issue. May we therefore please have a statement?

Mrs. Taylor: I do not know of any reason why we should have a statement. If the hon. Gentleman is concerned, there are still several stages of the Bill left—the remainder of the Committee stage, and Report—so there will be other opportunities for him to raise the matter with Treasury Ministers.

Mr. Tim Collins: Before the House rises, will the Leader of the House make time for a statement, if not a debate, on the outcome of the Department of the Environment, Transport and the Regions' accelerated roads review? She will know that many Members from all parts of the House are very concerned on behalf of their constituents about the outcome of that review. I hope that she will ask her colleagues to make a statement, rather than issue yet another significant policy development as a press release.

Mrs. Taylor: I am afraid that I cannot tell the hon. Gentleman when that review will be complete, but we appreciate the need to keep the House informed.

Mr. Desmond Swayne: Notwithstanding the answer that the right hon. Lady gave to my right hon. Friend the shadow Leader of the House, we did have a debate early in this Parliament on the salary of one of the Law Officers in another place, and great sport it afforded, especially when contrasted with the salary available for the Minister for Women. Will the right hon. Lady reconsider and arrange a debate on the palatial accommodation of the Lord Chancellor? Perhaps we could contrast that with the treatment of our own barber who, although he has no international reputation and does not travel abroad, is an honest, decent, working fellow.

Mrs. Taylor: I think it best just to say that I have nothing to add to the answer that I gave earlier.

Mr. Robert Walter: In the past month, the Prime Minister has negotiated the Amsterdam treaty, the President of the Commission has introduced his Agenda 2000, laying out spending proposals for well into the next century and the Commission has produced its proposals for bringing six new members into the European Union. When are we likely to be able to debate the future structure, financing and shape of the European Union?

Mrs. Taylor: There is clearly no prospect of such a debate in the immediate future. There will have to be debates and legislation following Amsterdam, when there will be opportunities to discuss those issues.

Mr. Leigh: On a point of order, Madam Speaker. Could you assist me by directing me to the passage in "Erskine May" that states that because a proposal is contained in a party document—a manifesto—it does not have to be shared with the House of Commons? You may answer that you are not responsible for what statements the Government bring to the House. As the pensions review relates to terms of reference and as we cannot


question the Government on it, I wonder whether you might elucidate further and better particulars with the Government on our behalf.

Madam Speaker: The hon. Gentleman is raising a point of order in relation to many questions that have already been put to the Leader of the House. Let me make my position as Speaker quite clear. I expect any Government, when there is a change of policy to be announced, to announce it in the House, preferably from the Dispatch Box, so that that policy can be questioned. That can also be done by means of a written question, which happened on a number of occasions with previous Governments. Only when there is a change of policy must the House be kept informed.
The Clerk will now proceed to read the Orders of the Day. [Interruption.] I think that that was a big raspberry to many Members.

Orders of the Day — CONSOLIDATED FUND (APPROPRIATION) BILL

Order for Second Reading read.

Question, That the Bill be now read a Second time, put forthwith, pursuant to Standing Order No. 56 (Consolidated Fund Bills), and agreed to.

Question, That the Bill be now read the Third time, put forthwith, and agreed to.

Bill accordingly read the Third time, and passed.

Orders of the Day — Council Tax

The Minister for Local Government and Housing (Ms Hilary Armstrong): I beg to move,
That the draft Council Tax Limitation (England) (Maximum Amounts) Order 1997, which was laid before this House on 14th July, be approved.
Before referring to the order and the caps proposed for Oxfordshire, Somerset and Warwickshire, I should like to make a few general points about the Government's view of the role of local government.
We believe that local government has an important part to play in Britain's future. Our policies will be based on our wish to reinvigorate local government, outlined in our manifesto. Those policies encourage increased democracy, with local people having the chance to have more of a say in the affairs of their council; increased autonomy, with more freedom for authorities to take their own decisions; increased accountability, with elected representatives being more visibly accountable for their actions; and increased partnership between central and local government and between local authorities and the people they serve and businesses and groups in their areas.
Only yesterday, the first meeting of the new central-local partnership took place, chaired by the Deputy Prime Minister and attended by several Cabinet Ministers and representatives from local government, to consider major local government issues, including the pressures on local government and the policies that we want to take forward with it. We believe that within that framework, local authorities have important roles as commissioners and deliverers of a wide range of local services.
The announcement in the Budget of an additional £1 billion for education next year is a clear example of our commitment to help local authorities in the all-important area of education. The increase will allow local education authorities to plan ahead over the next 18 months.
In the longer term, we are committed to abolishing crude capping. We cannot do so, however, until we have put in place other policies on local accountability, such as best value and local performance plans. In the meantime, we must settle the 1997–98 capping round in a way that is consistent with our undertaking to live within existing public expenditure plans.

Mr. Harry Barnes: There may be a number of Labour Members who are not entirely happy about the rate capping provisions and who are interested in the interpretation of manifesto and policy commitments, with which my hon. Friend has been dealing in connection with the position on rate capping. Once the order goes through, will that be the limit of the rate capping policy? If not, will the Government at least consider a rate capping policy that will be limited, in the way that it operates for Oxfordshire, Somerset and Warwickshire?

Ms Armstrong: My hon. Friend is right. We have a firm commitment in the manifesto, as I have just said. The Chancellor announced in his Budget, at the same time as providing substantial additional resources for education in the next year, that there would have to be a continuing

capping regime. We inherited great public finance problems, which we have pledged to bring under control. It is, however, my right hon. Friend's objective and mine to meet the manifesto commitment to abolish capping as soon as possible.
My hon. Friend will have heard me say that we want to put in place other policies on local accountability. He will hear in the very near future announcements that begin to fulfil some of our manifesto commitments on matters such as best value. No one is more determined than I am to see local government become far more accountable to local people.

Mr. Jeremy Corbyn: I hear what my hon. Friend says about the future of local government finance and her determination to have a different regime. Given that, why is it necessary to cap the expenditure of the three authorities when they have made it clear that they cannot deliver the services that their populations require within the level of the cap? What difference would it make if the capping order was simply not made?

Ms Armstrong: My hon. Friend will hear the reason as I continue my speech. This settlement was made by the previous Government. We made it clear at the time that if the settlement was agreed in Parliament, it would not be fair to authorities throughout the land to change the rules after the election, especially if the election was as late as 1 May, because they had set their budgets. All the councils had problems and during the debate on the settlement, hon. Members explained the problems that their local authorities faced. All authorities face severe problems. It would not be fair to vary the rules for three authorities without just cause. I would then be subjecting the Government and others to accusations of great unfairness.

Mr. Tony Baldry: Does not the hon. Lady recognise that by that answer she is running herself near to the possibility of judicial review? Under the legislation, she has to consider each local authority individually. By the nature of her answer, she has given the House the impression that she is not prepared to consider lifting the cap on any individual authority because, for electoral reasons, it would be unfair to the collectivity of other authorities. That is not the way in which the legislation is set out.

Ms Armstrong: If the hon. Gentleman reads Hansard, he will see that I have said that capping would not be lifted unless specific circumstances within the criteria allowed for it. Indeed, in one authority there were different circumstances, so the cap is not being placed automatically on all three authorities. My hon. Friend the Member for Islington, North (Mr. Corbyn) asked whether, without looking at the circumstances, I would say that the cap would not apply simply because certain authorities had spent over the cap. I was responding to the specific point that he raised.

Mr. David Heath: I am grateful to the Minister, but I still do not follow her argument and I hope that she will develop it further. She seems to be saying that her main criterion is uniformity, rather than


the clearly expressed wish of local people to spend locally derived money on local services. What has that to do with central Government?

Ms Armstrong: The hon. Gentleman is making a different point. We are debating today's order within the rules that were set out for the 1997–98 settlement. The hon. Gentleman is making a point that is outside the previous Government's view of the relationship between central and local government and I shall address it in due course, when we have the legislative ability to do so.

Mr. Robert Jackson: I am grateful to the Minister, who listened courteously to the delegation from Oxfordshire, as was her duty, because she has to take an objective view of the merits of the case. Will she give a categorical assurance that no assurances were given to Labour local authorities before the election that, if they did not set a budget above the cap, a new Labour Government would make concessions to other local authorities? It is believed that such assurances were given and her decision reflects that belief.

Ms Armstrong: I continue to marvel at the rumours that go round. There was certainly no such commitment on my part. However, there was a commitment that once the process had been agreed by the House, we would abide by it. We did not think it right to change the rules in the middle of the process. We made that absolutely clear to all local authorities. The Secretary of State for Health made that perfectly clear on national television, and we both made it clear in the House and when we met the Local Government Association.

Mr. John Austin: I appreciate the real problems that my hon. Friend is experiencing, having inherited an inherently flawed system from the previous Government. I recognise the difficulties that she and her colleagues face, given that most authorities have operated within the rules. However, I hope that she will recognise my difficulties, as a former councillor of some 24 years and the former leader of a local authority that was rate-capped in every year that rate capping operated, although we were a low spender and a high provider of services and were recognised by the district auditor to be an efficient and effective council. Does she recognise, therefore, that there are difficulties for those of us who have an inherent objection in principle to the concept of capping? Is there any intention to review the system this year? What assurances can she give us that we shall see an end to the entire principle of capping in the not too distant future?

Ms Armstrong: I, too, was a member of an authority and I, too, have spent much of my life wanting to reshape and reform the relationship between local and central Government. However, I remind my hon. Friend that we have had 18 years of movement in one direction. We are now determined to turn the tide and move in a totally different direction, so that local people have the opportunity to hold their authorities far more to account than they are able to do at the moment. As I said, I shall be bringing forward proposals very shortly, on part of that agenda. I hope that, when the House is able to find

legislative time, we shall be able to move on a much wider part of the agenda. We also have commitments in terms of public finance.

Sir Robert Smith: Will the hon. Lady give way?

Ms Armstrong: I should like to finish answering one intervention. I shall then press on. I shall take some interventions later, but I am only at the end of the first page of my speech and we are quarter of an hour into the debate.
I say to my hon. Friend the Member for Erith and Thamesmead (Mr. Austin) that I am determined that we shall move as quickly as we can to a new regime. In order to be fair to authorities, my right hon. Friend the Chancellor announced in the Budget two weeks ago the pattern for next year's settlement, so that they are able to plan and begin their budgeting now. We are determined to put public finances on a good footing, so that we can begin to deal much more effectively with the real deficit—which I accept exists in far too many authorities—in the quality of services that authorities are able to deliver because of severe cuts.

Mr. Tony Benn: What is the bearing on public finances if a local authority raises money in accordance with the wishes of its local electors and spends the money? There is no increase in borrowing. Indeed, under the private finance initiative, it is perfectly all right for companies to raise money by selling shares and then use the money locally. I do not see—and I think that many local authorities do not see—any relationship between local democracy and public finances, although I agree that, at national level, the Government face a serious situation in regard to public finances.

Ms Armstrong: I have tried to make it clear to all hon. Members that the Government have a clear agenda on changing the relationship between central and local government and, indeed, between local authorities and their populations. That is, of course, an important issue. We are already involved in important and intensive discussions with local government on those very points. We shall be bringing forward consultation papers, which will arise partly from the consultation with local government, and they will be available for wider distribution.
I am determined that we move in such a way that local government knows that it is involved, so that the process is not simply government by diktat, saying, "This is what you will respond to." The previous Administration have got us into this situation, and I shall not take unfair decisions in order to try to get out of it. Although I understand what my right hon. Friend the Member for Chesterfield (Mr. Benn) is saying, because of the way in which the previous Administration ordered things, the amount that local government spends is a significant part of public expenditure. That is why the capping regime exists. We shall do what we can as soon as possible.
The House will recall that the total standard spending for England for 1997–98 is £45.66 billion—an increase of 2.5 per cent. on 1996–97—and that the settlement provided for what the previous Administration intended represented a 3.4 per cent. increase in education standard spending assessments.
It is of course for each local authority to set its own budget and to decide its spending priorities. The capping principles for 1997–98 allowed almost all authorities to increase their spending by at least the total of increases in their education, social services and fire SSA blocks. That has become known as passporting. The result was that English authorities could on average increase their expenditure by some 2.4 per cent. Shire counties, which are the relevant bodies today, could increase their expenditure by 2.2 per cent. on average.
I recognise that it has been a tough settlement for all local authorities, and it was not one that we voted for. However, we made it clear to local authorities well before they set their budgets that we had little choice but to stick to the caps already proposed by the previous Administration. By the time we came into power, all authorities had already set their budgets and only three had budgeted over cap. For us to announce a general relaxation of caps at that stage would have been totally unfair to all the authorities that had previously taken tough budget decisions. As a result, when we confirmed the capping principles on 22 May, we proposed cap limits that required Oxfordshire, Somerset and Warwickshire county councils to reduce their budget requirements. All three authorities have challenged their caps—as the legislation allows—and have proposed that they should be allowed to budget at the level that they had originally set.
I should stress that, in reaching a view on the final capping limit for those authorities, we have to take account of the specific local circumstances of each authority. We have, therefore, considered each county's case carefully and I have met delegations from each authority to hear its case in detail.

Mr. Robert Jackson: The Minister rightly says that she is obliged to consider the specific case of each authority, but that completely destroys her argument that she is simply implementing the previous Government's policies. Last year, the previous Government agreed to additional resources for Oxfordshire. They were prepared to consider the case and they met it. This year, the Minister—given the same opportunity to consider the local arguments and circumstances—has turned Oxfordshire down.

Ms Armstrong: Oxfordshire put a specific case this year and I considered it. I shall deal in a moment with the specifics of the case.
During the debate, I am sure that we shall hear many examples of the efficiency of each authority. I have made it clear before that it is important that authorities pursue efficiency gains, as that will enable them to provide the best services at value for money for local people. I look for that continuing improvement in authorities. Capping, however, is not about whether an authority is efficient: it is about whether the cap proposed for that authority is reasonable, achievable and appropriate. The fact that an authority claims to be efficient is not of itself a justification for it to take a larger slice of the cake of general Government expenditure. The demands of individual authorities have to be examined in the context of the needs of the economy as a whole.

Mr. Bill O'Brien: I accept that the limit set by the Government is within the confines of the

amount that an authority needs to provide its services. My local authority and I are concerned about the formula that is used to distribute resources and determine their level, because it contains discrepancies in many areas, including the education of children, the provision of social care and other issues. Changes must be made for the sake of fairness and the genuine need to help local government. Will my hon. Friend take those concerns into consideration?

Ms Armstrong: rose—

Mr. Mike Hancock: Will the Minister give way, on the same point?

Ms Armstrong: I must deal with one intervention at a time, and I am sure that you, Mr. Deputy Speaker, will ensure that I do.
I accept the point made by my hon. Friend the Member for Normanton (Mr. O'Brien) that there is a feeling abroad, especially in his local authority and in many nearby, that the formula has not been fair. He will know—if he did not, I hope that he will ensure that his authority immediately takes advantage of the knowledge—that working parties involving the Local Government Association and officials from my Department are already examining the criteria, and the case that authorities such as his have made.
I hope that we shall be able to come up with a fairer system. We shall not be able to do everything that we would want to do, because that will need action such as revaluations and more research. None the less, we are determined to make things much fairer, and to ensure that local authorities at least know that they are part of determining the system, as well as having it imposed on them.

Mr. Hancock: The Chancellor of the Exchequer had a short period—less than 10 weeks—to prepare a Budget and present it to Parliament. So does the Minister not believe that her Department had ample time to prepare a change in legislation that could have been agreed, and would have allowed a fair system to operate in local government? Does she think it fair that a Labour Government are ordering local authorities to sack teachers and to deprive the elderly of domiciliary care that they desperately need and deserve?

Ms Armstrong: I am not certain exactly what legislation the hon. Gentleman would have expected us to put through the House in that time. We are not asking authorities to sack teachers; we are asking them to order their priorities within the organisation so as to deal with the priorities of their own areas.
Oxfordshire has set a budget of £345.530 million—£6 million above its proposed cap. It argues, as its representatives did when they came to see me, that since 1991–92 it has reduced spending by £60 million, so the scope for further savings is severely limited. It also argues that many of the spending pressures are outside its control, and that it has no significant reserves that it could use to support its revenue spending.
I do not dispute the fact that Oxfordshire has reduced its spending in recent years. I would point out, however—for it is not always made as clear as it might be—that we


are talking about reductions against plans and projections, not about cash cuts. In fact, since 1991–92, Oxfordshire's budget has increased, on an adjusted basis, by 17 per cent. in cash terms. Furthermore, all authorities have had to make significant reductions in recent years.
Oxfordshire challenged its cap last year and as a result was granted a supplementary credit approval for £3.5 million. It was made perfectly clear at the time that that was meant as a one-off measure, to give the authority time to tackle its budgetary problem. As the right hon. Member for Suffolk, Coastal (Mr. Gummer), the previous Secretary of State, said in last year's debate, the SCA was intended to give Oxfordshire
another year to get its budget into line with our assessment of an appropriate level of expenditure."—[Official Report, 22 May 1996; Vol. 278, c. 355.]
There is nothing—and there was nothing either in its presentation to me or in the answers to the questions that I asked—to suggest that Oxfordshire used the time provided by that one-off support to bring its expenditure more into line with its cap this year. On the contrary, the SCA was used solely to support revenue expenditure at a level that clearly would not be sustainable this year.

Mr. Ken Livingstone: rose—

Ms Armstrong: I think I have already given way enough—

Mr. Livingstone: The Minister is misleading the House.

Ms Armstrong: It is now even less likely that I shall give way.

Mr. Livingstone: rose—

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The hon. Lady is not misleading the House; neither is she giving way.

Mr. Livingstone: On a point of order, Mr. Deputy Speaker. Most hon. Members have received a briefing that clearly states that Oxfordshire is the lowest-spending English county—whereas the Minister is making it sound as if Derek Hatton runs the damn place.

Mr. Deputy Speaker: Order. Briefings that may be circulating have nothing whatever to do with the Chair, who is concerned only with the business before the House.

Ms Armstrong: I have not put out any briefing, and I am going on to deal with the very point that the hon. Member has just raised. I am not saying that I will not give way at all, but I do think Members should listen to what I have to say about Oxfordshire before I give way again.
We accept that Oxfordshire has no significant useable reserves, although it is by no means the only authority in that position. Furthermore, that of itself is not sufficient reason to agree to a concession. If it were, it would be a perverse incentive for authorities to be profligate with their reserves so as to get a capping concession. That would hardly be a sensible signal to give local authorities.
We have carefully considered all the relevant aspects of Oxfordshire's case. We do not consider its position different enough from that of other LEAs to justify a relaxation in its capping limit. Its permitted increase of 2.2 per cent. was the average for the counties and more than the average for other LEAs, such as metropolitan districts, which received 1.8 per cent.—yet all of them managed to set budgets within their provisional cap. It was difficult and painful, but they did it. We therefore propose that the original cap should be enforced. If the draft order is agreed to, that will result in a council tax reduction of almost £28 for a two-adult, band D household in Oxfordshire.
I understand that Oxfordshire is taking steps to put its financial house in order; it discussed that with me at a meeting. Councillors told me that they are in the process of adopting an action plan, which will involve short-term reviews, medium-term planning, target setting and zero-based reviews. I hope that those measures will bring real benefits to the authority through efficiency gains and improved service delivery.
To answer my hon. Friend the Member for Brent, East (Mr. Livingstone), we do not think that spending per head is the best measure of need to spend. Making allowance for the differing circumstances of each authority, Oxfordshire spends more than 13 other county councils do, compared with SSA. I did not therefore have sufficient grounds to treat Oxfordshire as a special case and raise its cap.

Dr. Evan Harris: The hon. Lady has said that the £3.5 million supplementary credit approval is sufficient this year to solve Oxfordshire's problems, yet in last year's debate she agreed with other hon. Members that it would be no more than a temporary measure to solve the acute problems at that time. Do not Oxfordshire's problems this year result solely from that temporary measure? Interest has to be repaid on the loan—

Mr. Deputy Speaker: Order. That is far too long an intervention.

Ms Armstrong: I understand the point that the hon. Gentleman is trying to make. But I did not say it was sufficient; I said it was given for a specific purpose. The authority made the decision not to use it for that purpose, and that is part of the problem that it has this year.

Mr. Robert Jackson: Will the Minister give way?

Ms Armstrong: No. I believe that I have given way twice to the hon. Gentleman.

Mr. Livingstone: She has not given way to me, either.

Ms Armstrong: Fine. I said that I would give way when I had finished the Oxfordshire case, and I shall do so.

Mr. Livingstone: The problem is that in the 1980s a Conservative-controlled council kept spending at a bare minimal level. Now that a decent coalition has come together, the council is caught because of its inheritance. It is not fair, because the system depends on whether one has the good or ill fortune of having had a council of a particular complexion in the past.
The Minister speaks of the need for accountability, but is she not aware that Oxfordshire councillors went to the people on the same day that we in the House were elected, and won an overwhelming mandate for the council's budget? What right has a Cabinet dominated by people from Scotland and the north, who have had the good fortune to have long-standing Labour councils that have built up decent services, to tell people from southern areas that we cannot catch up?

Ms Armstrong: It is interesting to hear that the hon. Member now wants to represent a shire area. I would welcome him to Durham; we, too, are a shire area. We may be in the north, but my authority suffers many of the same problems as Oxfordshire, but with the lowest income per household of anywhere in the country. I will not take lectures, even from my hon. Friend, about problems in local authorities.
Somerset has set a budget of £288.145 million, £3.4 million above its provisional cap, and says that all the additional money will go to schools and social services. It argues that it has the lowest permitted increase of all the counties and no significant useable balances. It also stresses how efficient it is.
It is worth repeating that capping is not fundamentally about efficiency. I hope that I can introduce a regime that is much more about efficiency. If it were, local authorities could simply increase expenditure as they saw fit, provided that they remained efficient. Such an approach, however, takes no account of the need that all Governments have to ensure that local authorities work with them in their public expenditure ambitions.
Somerset claims that all its additional spending above the cap is for education and social services. If that were to be the case, a budget at cap would involve those services being reduced by £3.4 million. In fact, Somerset has told me that, if it budgets to cap, the £3.4 million of savings will be made this year by cutting capital expenditure.

Mr. David Rendel: Liberal Democrat Members recently congratulated the Government on signing the charter for local self-government, which was an excellent thing to do. Surely the Minister must realise that that is completely incompatible with what she has just said about the need for Governments to control local government expenditure.

Ms Armstrong: The hon. Gentleman will see in Hansard tomorrow that that is not what I said.
As with Oxfordshire, we accept that Somerset has no significant useable reserves but, as I have already explained, that of itself cannot be sufficient reason to agree a capping concession.

Sir Robert Smith: The Minister is saying that the absence of reserves cannot be accepted of itself as a condition for lifting the cap. She said in the case of Oxfordshire that the reason for not wanting to do that was that it would set a precedent, but she also said that she was planning to change the whole capping regime, so surely it

would be reasonable to accept this year that with no reserves it would be stupid to impose a cap, which can only do damage to this last year of the current regime.

Ms Armstrong: I think that I have dealt with that matter already. It is truly remarkable what hon. Members hear: they hear what they want to. I did not say in regard to Oxfordshire that anything was a precedent. Indeed, I talked about Oxfordshire not having useable reserves, and that not being a reason to lift the cap. The hon. Gentleman may disagree with my explanation, but I have none the less given it.
Having carefully considered all the relevant aspects of Somerset's case, I do not consider its position to be sufficiently different in degree or in kind from that of other local education authorities to justify a relaxation in its capping limit. Its permitted increase of 2 per cent. was the same as that of 10 other counties, and more than the average for metropolitan districts. We therefore propose that its original cap should be enforced. If the draft order is agreed by the House, it will result in a reduction of council tax in Somerset of £20 for a two-adult band D household.
Warwickshire has set its budget at £294.335 million—£2 million above its proposed cap. Warwickshire's case is unusual in that it turns on a single issue: the interaction between capping and the supplementary credit approvals that it has received for its major schools reorganisation programme. The difficulty for Warwickshire is that, although it gets additional standard spending assessment to cover the costs associated with the SCAs, it cannot increase its expenditure in the same way—the allowance was not passported through. As a consequence, the costs of servicing the SCAs have to be met by making reductions elsewhere in its budget.
We would not normally make a capping adjustment to reflect the costs of SCAs. However, we are keen to encourage authorities to grasp the nettle of removing surplus places. Warwickshire has made a serious attempt to tackle the problem of surplus places. Its reorganisation programme is by far the largest in the country; it has needed £27 million of SCAs from the Department for Education and Employment and has involved the closure of 24 schools and the merger of 22 more.
The results have been impressive: surplus places are down from 19 per cent. at the beginning of the 1990s to a projected 9 per cent. by 1999. Warwickshire has demonstrated that the £2 million that it has budgeted above the cap is an accurate reflection of the impact on its revenue budget of the schools reorganisation programme. It has also said that, if the cap is relaxed, all the additional £2 million will go to schools.
We have taken account of the fact that Warwickshire has been prepared to take tough decisions that will lead to savings in the longer term. We therefore propose that Warwickshire be capped at £294.335 million, £2 million above its original cap. That means that it will not have to reset its budget or incur the costs of rebilling.
We have considered carefully all the points raised by all the authorities involved in the capping process, to ensure that the caps that we have proposed are reasonable, appropriate and achievable. Where there are special circumstances, we have been prepared to make a concession. If the order is approved, we shall serve a statutory notice on each authority formally setting its cap.


The authorities will have 21 days to reduce their budget in line with their cap and to set new lower council taxes. The final outcome will be a reduction in this year's council taxes in the affected areas of more than £9 million.
I commend the order to the House.

Mr. Tim Yeo: In proposing the order, the Minister attempted to claim that it maintains the previous Government's policy. That is an argument that I have heard with interest and increasing astonishment. It is not an argument that has been much used by the Government, even on those issues on which they have been attempting to maintain our policies. It is also not an argument that rests easily with their constant insistence, on many other issues, that they will stick to their manifesto commitments. Indeed, the inclusion of a commitment in the manifesto apparently removes the need for the Government to ask for parliamentary time to allow a debate to take place before the policies are implemented.
As regards this order, the argument is completely flawed—and not merely by virtue of the fact that it reverses the stance that the Labour party took when we last debated this matter just over a year ago. Since the previous Government set out the figures for council spending—the standard spending assessments, the provisional capping limits and all the rest of the data—the situation has materially changed in three respects. First, the inflation target has been officially increased from 2 per cent. to 2.75 per cent. both for the current year, 1997–98, and for 1998–99. By loosening the reins on inflation without any compensating increase in the spending limits, the Government have effectively cut the level of service that councils can provide and that council tax payers can reasonably expect to receive.
Secondly, having handed over control of interest rates to the Bank of England—not, incidentally, a manifesto commitment, but also an issue on which the Government did not feel it necessary to come to the House to announce—the Chancellor introduced an ill-judged Budget that attacked the corporate sector and penalised long-term saving but did nothing to curb consumer spending. As a direct result of that Budget, interest rates have risen, thus adding further to the costs that local authorities must bear.
Thirdly, the Chancellor's smash-and-grab raid on pension funds, which—[Laughter.] It may be a matter of amusement to Labour Members, but every holder of a personal pension will now have to pay considerably more to maintain the benefits that they thought they had secured until the Chancellor launched his smash-and-grab raid. That may be a matter of amusement to Labour Members, but it is not a matter of amusement to millions of pension fund holders outside the House.

Mr. Tom King: Is my hon. Friend aware that it is not merely a question of the extra that they will have to pay? According to the director in charge of the pension fund for all the employees of a company in my constituency, the employees are already paying the maximum that they are allowed under the Inland Revenue rules. The measure will mean that they will all face a cut in their pension, which is unavoidable.

Mr. Yeo: I am grateful to my right hon. Friend for pointing that out. It is a very serious matter.

Mr. Bill OIner: On a point of order, Mr. Deputy Speaker. The intervention had nothing to do with the order.

Mr. Baldry: Further to that point of order, Mr. Deputy Speaker

Mr. Deputy Speaker: I shall answer the point of order before we hear about anything further to it. The hon. Member for Nuneaton (Mr. OIner) has a point. This is a local authority matter. It relates to a number of counties in England. It is not, therefore, as wide as employees' pensions.

Mr. Baldry: Further to the point of order, Mr. Deputy Speaker. Clearly you were not here for the beginning of the debate when Madam Speaker was in the Chair. She allowed the Minister to range much more widely than the close confines of the order and to introduce the debate, as I am sure your Clerks will advise you, with a general summary of the Government's local government policy. It is staggering that the Treasury team should be afraid to acknowledge that the Budget provisions on pension funds will cost Oxfordshire £2 million, which it estimates will cost 100 teaching jobs.

Mr. Deputy Speaker: Order. We are dealing with local government finance, not pensions in general.

Mr. Yeo: I will explain the exact consequences of the Chancellor's smash-and-grab raid for the local authorities mentioned in the order.

Mr. Nicholas Soames: In the context of local authority finance—it is clearly in that context—is my hon. Friend aware that West Sussex county council has written a letter to Sir Jeremy Beecham warning him that the finances of the county council and, therefore, of council tax payers will be grievously affected by the Chancellor's smash-and-grab raid on the pension fund, as will pensioners? Will he explain to the Minister for Local Government and Housing on behalf of Conservative Members that it is not enough for her merely to sit there with a smug smile on her face when pensioners and council tax payers will be grievously undermined, having already been so undermined by a lamentable Liberal Democrat administration—now succeeded by an admirable Tory one? Nevertheless, the measure will cause great harm to West Sussex county council.

Mr. Deputy Speaker: Order. Perhaps the House can do me a service. As a guideline, interventions should not be as long as the hon. Gentleman's.

Mr. Yeo: Nevertheless, Mr. Deputy Speaker, in that case your tolerance was clearly justified. My hon. Friend has a growing—indeed, a formidable—reputation as a doughty champion of the interests of West Sussex county council, its council tax payers and all current and future pensioners of that council. That is a serious issue, which Labour Members persist in finding extraordinarily funny. It is not funny for pensioners whose pensions are now at risk or for holders of personal pension funds who will


have to increase contributions to maintain their benefits, and it will not be funny for council tax payers throughout the country.

Ms Armstrong: Does the hon. Gentleman accept that there will be no impact on local government until April 1999 at the earliest? [Interruption.] I am intervening, so I cannot respond to all those sedentary interventions. We have already begun to engage with local government on how the change will affect it and on the necessary steps to ensure that council tax payers will not have to pay anything additional.

Mr. Yeo: To use a phrase used many years ago in the House, I intend to deal closely and with relish with precisely the point the hon. Lady made, which is wholly unfounded, completely untrue and reflects an arrogance, a disregard and a contempt for the interests of pensioners current and future that I find breathtaking even from a Minister as ignorant of her brief as the hon. Lady.
The smash-and-grab raid was carried out in defiance of warnings received from Labour Back Benchers. It has placed a massive extra burden on councils.

Mr. Andy King: When?

Mr. Yeo: As of two weeks ago. The income of council pension funds throughout the country started to be reduced two weeks ago yesterday. Never mind whether the next valuation is this year, next year or in 1999, the consequences are being felt today and the bill grows daily. The abolition of advance corporation tax relief on dividends has been estimated by the Labour-controlled Local Government Association to cost councils £300 million a year. I will return to that point.
The three new burdens on councils—the increase in inflation, higher interest rates and pension tax changes—all result directly from—

Mr. Austin: On a point of order, Mr. Deputy Speaker. I seek your guidance. Is the debate about council tax or the council tax limitation order? In which case, is the hon. Gentleman in order to extend the debate?

Mr. Deputy Speaker: The hon. Member for South Suffolk (Mr. Yeo) is in order. If he had been out of order, I would have been the first to say so.

Mr. Yeo: I am grateful to you, Mr. Deputy Speaker.
The three burdens on councils that I mentioned all result directly from actions of the Labour Government taken since 1 May. As councils all over the country, including the three mentioned in the order, start to feel the pinch, I have no doubt that the Government will repeat that they have merely maintained the limits set by their predecessors and that some of the burdens do not have to be dealt with until 1999. Those claims are rendered false by the deliberate way in which council costs have been substantially increased. Those extra costs arise as of now. It is because that situation has changed so fundamentally that the Opposition will not be voting to support the order this evening.

Mr. Robert Jackson: My hon. Friend is dealing effectively with the Minister's central argument that she

is simply implementing the policy of the previous Government. As he explained, that is a highly implausible position. Does he accept that, last year, under the system by which it is possible for counties to set budgets above cap and appeal for their cases to be considered on their merits, Oxfordshire's case was recognised by the Conservative Government and that the Minister then responsible, my right hon. Friend the Member for Skipton and Ripon (Mr. Curry), has stated publicly that he would have recommended acceptance of a budget above cap if the Conservatives had been re-elected?

Mr. Yeo: My hon. Friend has placed on record a most important point. [Interruption.]

Mr. Deputy Speaker: Order. I am sorry to keep interrupting but there is too much noise in the Chamber. I must be able to hear what the Opposition spokesperson is saying. The House should be calm.

Mr. Yeo: The Minister gave an intriguing answer to the hon. Member for Normanton (Mr. O'Brien), who is no longer in his place. He asked about the distribution of resources among local authorities. The Minister replied that she hoped to achieve in due course a fairer distribution. What does that mean? If it means more cash for Normanton, which councils will receive less cash in the name of achieving greater fairness? Which of the criteria that are used to allocate resources among councils are she and her officials considering changing? When the Under-Secretary replies, will he say which criteria he proposes to revise?
In her 40-minute speech, the Minister, despite starting by saying that she would make some general remarks about the Government's intentions on capping, gave very little clue about their precise intentions. That is a great pity because there is much uncertainty among councils and council tax payers. Indeed, there appears to be a fair amount of uncertainty in the House, even extending to the Government Back Benches and the hon. Member for North-East Derbyshire (Mr. Barnes), who is no longer in his place.
The Labour party manifesto unequivocally pledged:
crude and universal council tax capping should go".
That pledge was repeated by the Deputy Prime Minister in his Budget day press release, but apparently it is not going to be honoured this year; nor, apparently, will it be honoured next year. When will it be honoured? When will councils enjoy the freedom that the Labour manifesto promised them and which many thought they would be starting to enjoy now? Will the Under-Secretary give the exact timetable?

Mr. Baldry: Does my hon. Friend agree that this is all the more extraordinary because it is one of the few changes that does not require primary legislation? Deciding on capping is a power, not a duty. There is nothing to inhibit the Government's exercising their power and achieving their manifesto objective, this year or any other, if they wish.

Mr. Yeo: My hon. Friend makes an important point. The matter could be dealt with immediately if the Government so chose. If when he replies the Under-Secretary is unable to give the House a firm timetable for


the implementation of the pledge, the suspicion will grow that it will join the growing list of manifesto promises that Labour has thrown into the waste paper basket.

Mr. Robert Jackson: Far from abolishing the crude system of capping, the Government have made it cruder by not applying it with proper discretion.

Mr. Yeo: One of the legitimate criticisms of the capping system is that it has a substantial arbitrary element. [Interruption.] I acknowledge that it is not an unflawed system. If the pledge is eventually honoured, what will replace the present capping system? Labour's manifesto also states:
we will retain reserve powers to control excessive council tax rises.
I wonder whether the hon. Member for Brent, East (Mr. Livingstone) suspects that that is capping under another name. Perhaps the Minister without Portfolio thinks that that is how capping should be described.

Mr. Livingstone: I suspect that something nasty that I do not agree with may be coming along, but what depresses me is that I have not heard a word of apology from the party that brought in capping, imposed it on councils, and bankrupted the councillors who fought it. To make stupid partisan points when we are discussing the quality of life for children in care and the elderly in the local authorities concerned will be regarded as offensive by residents of those areas who are watching this stupid knockabout. We should focus on the parts of the Minister's statement that many of us are deeply unhappy with. All that this rant from the Opposition will achieve is to force some of us who had no intention of doing so to go into the Government Lobby.

Mr. Yeo: I expect to receive appreciation from an unexpected quarter. The Government are unable to persuade the hon. Gentleman to vote with them by their arguments but, speaking for the Opposition, I have been able to do so on their behalf. I make no apology whatever for having saved council tax payers in Lambeth, Southwark, Hackney and Islington from outrageous increases in council tax, which were hardly ever by matched by quality of service, by means of the capping system.
The Minister said that the Government have a clear agenda. If she has a clear agenda, under the system that will replace capping, will councils that set budgets that the Government consider too high be subject to a cap? Will the Government continue to set spending guidelines for each council? If they will not, will they each year set a percentage spending increase applicable to all councils to be regarded as the maximum permitted? Will the increase be equivalent to the rate of inflation, or inflation plus 5 per cent., 10 per cent., 20 per cent., or what?

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford): That has nothing to do with the debate.

Mr. Yeo: It has everything to do with the debate because the Minister raised these very important questions in her speech. We wish to know the answers. In an hour or so, the Under-Secretary will have a chance to give them.
This debate is the ideal opportunity for setting out, even in general terms, the Government's thinking. Significant costs are incurred if a council that is capped has to revise its budget and send out amended council tax demands. If the Government retain a reserve power to cap without clearly stating in advance what specific criteria councils will be judged by, there is a danger of getting the worst of both worlds. Councils that still have spendthrift tendencies may wish to test the Government's resolve by setting sharply higher budgets. The general level of council spending is likely to rise quickly in the short term because councils may fear that they could later experience the re-imposition of capping. The sooner the Government clarify their intentions, the better.

Dr. Alan Whitehead: Will the hon. Gentleman set out the criteria that the Conservative Government set for capping when they instituted it?

Mr. Yeo: I appreciate that the hon. Gentleman has not been here long, but his party is now in government. It is the Government who must answer questions. When we come to fight the next general election we will set out our policies on local authority spending. For the time being, it is the Government who must answer questions about their intentions on the control of council spending.
I shall now return to the crucial subject of the Budget's abolition of tax credits for pension funds. The Chancellor took that extraordinary decision—a smash-and-grab raid—despite a stark warning from the hon. Member for Putney (Mr. Colman), who wrote to the Chancellor that it had been estimated that the abolition of ACT would add at least £300 million to local authorities' pension costs and that no such increase could be afforded by local authorities without making further cuts to services to their local residents, given that the alternative—raising council tax—would be difficult under current restrictions.
The hon. Member's letter was written before the Budget and the figure of £300 million has been confirmed by the Local Government Association since the Budget.
The Government's reaction, however, remains extraordinary. We have seen this afternoon that many Labour Members consider it a matter of mirth. The Financial Secretary to the Treasury and, this morning, the Secretary of State for Social Security claimed that the Budget was good for pensions. Their claims fly in the face of reality. The reaction of the Minister for Local Government and Housing was dismissive and irresponsible. When she replied to the hon. Member for Putney on 3 July, she said that the Government would take all these factors into account in determining the level of local authority provision for 1999–2000 and subsequent years.
If councils do not increase their pension fund contributions until 1999–2000, the problem will have assumed horrendous proportions. Failure to act for the next two years does not make the problem disappear; it simply makes it much more serious. In some cases, depending on the actuarial position of individual pension funds—possibly those in West Sussex to which my hon. Friend the Member for Mid-Sussex (Mr. Soames) referred earlier—if the change is not responded to immediately by an increase in contributions, it might even jeopardise the possibility of individual pension funds meeting their financial liabilities. Extra contributions into those pension funds can come from


only one of three sources: cuts in services, increases in council tax, or a higher revenue support grant. The significance of those choices for today's debate is that, as long as capping remains in place, the second option is effectively ruled out.
All councils, including the three referred to in the order, face the prospect of cutting services. The shortfall in dividend income to pension funds started to accumulate two weeks ago, immediately after the Budget, so the longer the Government postpone a decision on how to meet that shortfall the worse the problem becomes. The £300 million problem faced by the Government this year becomes a £600 million problem next year and a £900 million problem by the time the Minister proposes to get round to considering it.
Somerset county council faces the prospect of having to curb spending plans by £3.4 million. By 1999–2000, it will have to find £6 million of extra pension fund contributions. My right hon. Friend the Member for Bridgwater (Mr. King) will explain to the House in a moment the consequences of the order for his constituents and those in the rest of the county. Consider how devastating the consequences of the Chancellor's smash-and-grab raid will be for Somerset.
Warwickshire county council made a persuasive case about the consequences of a £2 million reduction in spending plans—the effect of the cap originally announced by the Secretary of State. By 1999–2000, Warwickshire will have to find almost £4 million for extra pension fund contributions.
Oxfordshire county council proposes to meet the required cut of £6 million by sacking 50 teachers, closing 15 small libraries, abandoning transport for post-16 pupils, cutting £500,000 from building maintenance and cutting £1 million from the roads maintenance programme. On the subject of Oxfordshire, which my hon. Friend the Member for Banbury (Mr. Baldry) will enlarge on in a moment, I ask the Minister for Local Government and Housing whether she agrees with the statement made on 22 May 1996:
The Government are acting against the wishes of the people of Oxfordshire … The people want the opportunity to fund their schools and their social services properly, but they know that the Government will manipulate the figures to ensure that they cannot do that. That is not good enough."—[Official Report, 22 May 1996; Vol. 278, c. 359.]
That is what the hon. Lady told the House in a debate last year. If she still believes that that is true, why is she moving this order today? If she does not believe that it is true, what caused her to change her mind?

Mr. Robert Jackson: My hon Friend has described the costs that will be imposed on pension funds against the background of the lowest-spending county council in the country—Oxfordshire. That county council would need to spend an extra £13 million if it were to spend at the average budget level. The Minister spoke about it as though it were a profligate council; it is a well-run council that will be gravely damaged by the order.

Mr. Yeo: My hon. Friend is absolutely right. On top of the cuts which Oxfordshire county council faces as a result of capping, it faces an extra £2 million bill for pension fund contributions every year from now on. That

means that another 17 teachers face the sack, five more small libraries face closure and more buildings and roads will go unmaintained. That is the effect of the smash-and-grab raid the Chancellor has carried out on the pension fund to which Oxfordshire county council contributes.

Mr. Soames: Does my hon. Friend agree that the woeful tale of what has been inflicted on Oxfordshire as a result of the Government's decision could also be inflicted on West Sussex? If it has to make up the shortfall brought about by the smash-and-grab raid from its own resources, the same awful cuts will be inflicted on West Sussex county council—with a new administration—which has run its affairs with a good deal of prudence.

Mr. Yeo: My hon. Friend has put his finger on the point. His county council and many others will face a crisis when they draw up their budgets next year because of the Minister's refusal to say that she will even consider the problem for two years.
One local authority which, I am glad to say, avoided capping this year, is the London borough of Hillingdon. Its spending is currently some £190 million a year but it now faces a bill of £2.2 million a year extra for its pension fund contributions. Where do the Government think Hillingdon should find that money? Will Hillingdon's cap be raised next year so that the shortfall—

Mr. Deputy Speaker: Order. The hon. Gentleman must not dwell on local authorities that are not specifically mentioned in the order.

Mr. Yeo: I accept your ruling, Mr. Deputy Speaker. Hillingdon had been in my mind because I spent a pleasant morning there today in the company of an excellent local resident and business man, John Randall.
In dealing with this issue, the Government come face to face with an unpleasant reality. Those early joyful days when the Government Benches were packed with new hon. Members waving their Order Papers at every utterance of the Minister who was speaking are passing. Many Labour Members elected for the first time this year have backgrounds in local government. They know privately what this smash-and-grab raid means for councils throughout the country, which is why they have been told not to speak to the media about it. I hope that, before long, some of them will have the courage and integrity to recognise that they were elected not to echo the Prime Minister's words or to jump at the whim of the Minister without Portfolio, but to serve the interests of their constituents, to exercise their judgment on behalf of the voters and to use the freedom of speech in the House. Hiding from the problem created by the Government will not make it go away; postponing looking for a solution will not make the solution easier to find, cheaper to implement or more palatable to those who pay the bills.
This debate is timely. The order is a valuable reminder of the difficulties faced by many councils—difficulties created in the past two and a half short months by the new Labour Government. They are difficulties to which the House will return, time and again, in the coming months and they will get infinitely worse as each week goes by without the Government facing up even to the need for a solution. There is time, even during this debate,


for the Government to show that they understand and are willing to grasp the nettle but, in the absence of any indication that they are doing so, Conservative Members will not vote for the order.

Mr. Andy King: Thank you, Mr. Deputy Speaker, for allowing me to use today's debate to make my maiden speech.
I am extremely honoured and privileged to be here representing the constituency of Rugby and Kenilworth. I turn first to the person whom I have replaced, Mr. James Pawsey. He was a good constituency Member of Parliament and an extremely worthy opponent. I wish him and his family well. A Member of Parliament who preceded James Pawsey was Bill Price, who served the constituency of Rugby between 1966 and 1979. Throughout the campaign, I was constantly reminded of how good a constituency Member of Parliament Bill Price had been by people who spoke of him warmly and affectionately. I have never met Bill Price, but I look forward to meeting him one day soon. I thank him for the service he gave to Rugby.
In preparing for my speech, I looked at the maiden speeches of both James Pawsey and Bill Price. It is strange how cyclical issues are—they come back to haunt one. James said:
I move from the question of reorganisation to that of falling rolls. I believe that falling rolls, particularly in primary schools, represent a magnificent opportunity to improve the teacher-pupil ratio.
Sadly, during their 18 years in government the Conservatives failed singularly to address that issue, which is so important to young children. He also said:
Indeed, I hope that the present Administration will look for fairer means of financing local government, for the present system of financing local government is manifestly unfair."—[Official Report, 16 May 1979; Vol. 967, c. 346.]
The Conservatives failed on that, too, I am afraid. They failed terribly in respect of Warwickshire and the people of Warwickshire do not feel that they have been treated fairly, especially in the past seven years. Lastly, James turned to another issue of the day—the Hospital of St. Cross, which has been constantly under threat throughout the period during which my predecessors were in this place.
The constituency of Rugby and Kenilworth is at the very heart of England. It has enjoyed local industry—especially manufacturing—and is now beginning to welcome new industries to the area. We have two large traditional industries. I wish GEC Alsthom especially well at this time. I visited it some six months ago with my right hon. Friend the Member for Derby, South (Mrs. Beckett), now President of the Board of Trade, and I was extremely impressed by the standard and quality of the manufacturing taking place in Rugby. Peugeot has a plant at Ryton in my constituency and is also doing extremely well. Warwick university is situated near Kenilworth and has an enormous influence on life in the town.
Rugby and Kenilworth have suffered quite badly during the recessions experienced under the Conservative Government, but we are at last seeing regeneration in our area. Large shops are returning to our town centres, which currently look more like Beirut than those of a modern economy. Sainsbury has recently moved into Kenilworth

high street, which is excellent news because the shops there were dying. At long last, there is about to be a major redevelopment in Chapel street in Rugby, and Marks and Spencer is committed to opening a large new shop there. I welcome those moves by two large retailing companies, which show confidence in Rugby and Kenilworth.
As one of my first duties, I had the privilege of opening the new temporary library in Rugby—another long-awaited development. In fact, we have been waiting for the best part of 50 years and we are looking forward to having within one or two years a new library, a new museum and a new art gallery in Rugby.
Jim Pawsey referred to the reorganisation of schools and the use of receipts from such a reorganisation. As my hon. Friend the Minister for Local Government and Housing said, we undertook a major reorganisation of Warwickshire schools. We based that reorganisation on a full and proper consultation with all of the stakeholders in the system—pupils, governors, parents and teachers—and at the end of the process we came up with the right result. We took some very painful decisions, but the children of Warwickshire and of my constituency have benefited enormously from that reorganization.
Today the people of Warwickshire are about to embark on another consultation exercise, this time about the future of health services at the Hospital of St. Cross. I want that consultation to be as meaningful as the exercise undertaken in respect of the reorganisation of education in Warwickshire. I want my constituents to play a full and informed part in the debate, which is to take place over the next three months. I want us to emerge at the end with a national health service that is worthy of a Labour Government—one that enables us to deliver good-quality services at local level for our country's people.
I greatly welcome my hon. Friend the Minister's handling of the sensitive issue of the £2 million for Warwickshire. That money is vital to the county in delivering the quality of education to which we are committed. My hon. Friend listened to our case and understood our uniqueness and I am eternally grateful to her for doing so. She mentioned that we took out surplus places in Warwickshire—in fact, 10,000 were taken out during the reorganisation, and every penny of the money saved has been put back into the pupils. We have targeted all our expenditure on the children who need the resources for their education. We have also reinvested in crumbling schools, and I am proud of the results of our efforts.
I am also very proud to have been a member of Warwickshire county council for the past eight years. Ian Bottrill has provided superb leadership in guiding us soundly and safely through a very difficult period. I pay tribute also to John Airey, who was chair of education during the reorganisation. He recently left politics, and I wish him well. I hope that he will return to public office in the very near future.
In Warwickshire, we are determined to provide the best possible education for our children. We will use the £2 million to reduce class sizes for five, six and seven-year-olds, and we shall deliver on the Labour party's promise to make education our first priority. As I have said, the Minister has listened to and understood our arguments, and she has begun to address the unfairness in funding for Warwickshire.
The previous Government listened to us often, but they never took action to address the problems. This Government have acted: we are committed to a partnership


between central Government, local government and industry. I look forward to participating in that meaningful partnership, and I shall truly value the experience of working together. At long last, we have a national Government who support local government.
Warwickshire representatives at all levels—Members of Parliament and councillors, both county and borough, district and parish—have worked together across party political boundaries. We have agreed fully when fighting for Warwickshire's cause not just in the past few months, but over the past five years. I hope that that spirit of co-operation will continue. I urge Conservative Members of Parliament to show the same level of support for Warwickshire's case as the local Conservatives in Warwickshire.

Mr. Tom King: It is a great pleasure to follow the hon. Member for Rugby and Kenilworth (Mr. King), who delivered his maiden speech. Coincidences often occur in this place, and the hon. Gentleman may be aware that I spent five years of my life—at a rather junior age—in Rugby. I therefore, know the Hospital of St. Cross.
The hon. Gentleman showed a fine disregard of the rules in failing to mention one of Rugby's greatest achievements, which has become a substantial export earner for this country. I watched the poor English rugger team being mauled in Australia, but they earned £2 million in the process, so one can see what a powerful industry was founded by a humble school and a sound disregard for the rules.
I am sure that hon. Members enjoyed the hon. Gentleman's remarks and the sincerity with which he delivered them. We look forward to hearing from him again. He struck one very good bipartisan note. Too often in the House in recent years, we have heard allegations about the total collapse of manufacturing industry in this country. Such attacks do no credit to the fine manufacturing businesses in this country. The hon. Gentleman was right to pay tribute to two fine businesses which stand comparison with any in the world: GEC Alsthom and Peugeot. The House appreciated his references, as will the companies. One never knows one's luck in this place: perhaps the brief entrance and departure of my right hon. Friend the Member for Kensington and Chelsea (Mr. Clark) may secure the hon. Gentleman an entry in a future diary, as other hon. Members have enjoyed—or not enjoyed—in the past.
As a Somerset Member of Parliament, I am disappointed that, because of the breakneck speed of the timetable imposed on the passage of the Finance Bill, my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory)—who wished very much to participate in the debate—is not able to take part as he is helping to lead for the Opposition in Committee. I am sure that the Government will understand that this is a very sad day for Somerset, which faces the prospect of having to rebill every council tax payer in the county. This county, which faces a serious financial challenge and has no balances, now faces a bill estimated at £250,000—totally nugatory expenditure—to rebill the whole county.
I take no comfort or pleasure in telling the House that I gave the clearest possible warning to the Liberal Democrat administration on Somerset county council that

it was virtually certain to face this outcome. Unless one was prepared to ignore totally the Labour party's assertions in opposition and in government and imagine that, within a month of coming to government, it would overturn its most elementary manifesto pledges and loosen the purse strings on public expenditure, one did not need to have much political experience to recognise the risks that were being taken by the Somerset county council Liberal Democrat administration. It took the decision knowingly: it was warned by the chief executive officer, the county treasurer and the county solicitor of the risks involved. Two former county councillors, now the hon. Members for Somerton and Frome (Mr. Heath) and for Taunton (Mrs. Ballard), took the risk and voted for the proposal.
Somerset county taxpayers now face added expense, on top of the money that the previous Liberal Democrat administration wasted on expensive lawyers when trying to ban access to council land. It also wasted money on an abortive scheme to provide sites for new age travellers. The county could have employed 10 new teachers with that wasted money.

Mr. Robert Jackson: rose—

Mr. King: I am sorry, but I must speak directly. So far as I know, my remarks do not relate to Oxfordshire.
I take no pleasure in making these points. We do better for our county if we work together and listen to, and take, advice. I do not claim false credentials in this matter. Two years ago, we fought successfully to raise the cap for Somerset. I see that the right hon. Member for Yeovil (Mr. Ashdown) is in the Chamber: at the time, he kindly congratulated me on my actions. I shall always be prepared to stand up for my county when the cause is just, when a case can be made based on the evidence, and when there is some prospect of achieving a successful outcome.
Hon. Members who read the excellent brief prepared by the Library will see that, when Somerset exceeded the cap, we stood together, fought the case and won it. Those who look at the present case will see that there is no prospect of our taking it to a favourable conclusion.

Mr. Jackson: One of the Government's central arguments is that they are simply continuing the policies of the previous Administration. However, as my right hon. Friend points out, the previous Administration agreed to increasing the budget over cap in Somerset a couple of years ago.

Mr. King: I find it offensive that, if the risks had not been taken, the county council could have accepted a perfectly sensible proposal for maintaining the cap and expenditure within it. Funding for education and social services could then have been protected properly. However, that amendment was rejected out of hand. We are back where we started—but £250,000 worse off. The county must now make economies, which could have been achieved through sensible planning much earlier in the cycle, in a rush, well into the financial year. Hon. Members representing Somerset constituencies will have


received the letter from the county treasurer today saying that the council will have to search around to find the savings that must be made. Clearly, there will be hardship.

Mr. Paddy Ashdown: I apologise to the right hon. Gentleman and to the House for intervening when I shall not be able to stay for much more of the debate. I regret that very much.
The right hon. Gentleman is right to say that we have fought together on a cross-party basis. For that reason I deprecate the fact that he is now making the cheapest party political point. He criticises the argument about breaching the cap, but when the argument was put before the county council, did the Conservative members vote against it? No, they did not. They abstained. The right hon. Gentleman will go into the Lobby tonight to vote against the break of a cap, which he did not oppose originally. That is a totally irrational and illogical position. Does he not understand that?

Mr. King: The right hon. Gentleman knows perfectly well that the amendment put forward by the Conservative group, which would have enabled the waste of £250,000 to be avoided—[Interruption.] Will hon. Members who are not even Somerset Members contain themselves so that I may reply to the right hon. Gentleman? The amendment proposed by the Conservative group was voted down, calling the entire budget into question. Of course the Conservative group could not vote against the main question or there would have been no budget.
The leader of the Conservative group said that the difficulty was that some wretched Liberal Democrat would say that because the Conservatives had not opposed the measure, therefore they had supported it. I never dreamt that the leader of the Liberal Democrats would fall right into that trap.

Mr. Ashdown: rose—

Mr. King: I know that the right hon. Gentleman has to leave, but I hope that he will not mind waiting a moment.
I quote from the right hon. Gentleman's speech in reply to the Budget. He said:
Under a Labour Government, my county of Somerset will have to sack 90 teachers this year."—[Official Report, 2 July 1997; Vol. 297, c. 328.]
I give the right hon. Gentleman credit—he has said that before. The leader of the Liberal Democrats and the hon. Member for Somerton and Frome have said the same thing.
That is outrageous. The letter from the county treasurer today states that the council will look around for alternative savings. I understand that it is not considered necessary to sack 90 teachers this year. Alternative economies can be made. I challenge the right hon. Gentleman to make sure that he stops his colleagues in the Liberal Democrat party sacking teachers in Somerset this year. That must not happen. It would be intolerable if it happened because of the incompetence and risk taking of a Liberal Democrat administration.
The case is not helped if it is accompanied by misleading propaganda. We constantly hear the statement that Somerset had the lowest increase of any authority in the country this year.

Mr. David Heath: No—county. [Interruption.]

Mr. Deputy Speaker: Order. There must be no interruptions when an hon. Member is addressing the House.

Mr. King: Hon. Members say that Somerset had the lowest increase of any county. That is, to say the least, economical with the truth. They do not go on to say that 16 other counties had the same level of increase. What they say is technically true, but grossly misleading.
I hear it endlessly repeated by the leader of the Liberal Democrats that Somerset is the most efficient county in the country. I am proud of Somerset and I have been proud to represent it. Some of the things that the county does, it does well, but such assertions do not help the county. The Department of the Environment can easily establish the facts. I spent three and a half years on the Government Front Bench as Minister for Local Government, the job that the hon. Member for North-West Durham (Ms Armstrong) is doing now. It does no good for a county's case when people pretend too much or do not tell the whole truth.

Mr. Ashdown: The right hon. Gentleman knows perfectly well that I said that Somerset was, by the Government's own figures—his Government—the most efficient in the delivery of education. It has the lowest administration costs per pupil. Those are not my figures. They are not even the Audit Commission's figures, but those of his own Government, when they were in power.
I am a little confused by the right hon. Gentleman. He seems to be criticising Somerset county council for seeking to breach the cap, yet we understand that tonight he will go into the Lobby in favour of breaching the cap. Can he explain this inconsistency?

Mr. King: I will deal with all those issues in my speech, but I am worried about the right hon. Gentleman. Will he tell me when he has to go? [Interruption.] He has come into the Chamber, intervened twice and threatened to leave at any moment. He has asked me a fair question, but I hope that in fairness he will allow me to reply in the right order.
Some may consider these matters to be cause for amusement, but I agree with the hon. Member for Brent, East (Mr. Livingstone). I weep for Somerset and the money that has been wasted. The county faces grave problems. I am to lead a delegation to the Minister next week to complain about the unfairness of the allocation system, and to seek to get the area cost adjustment altered. Those are serious matters. We cannot afford the waste and extravagance that we face.
I shall now say something that the right hon. Member for Yeovil may find more agreeable. I shall deal with the Government's performance. We listened to the Prime Minister being singularly economical with the truth in his exchanges with the right hon. Gentleman. The right hon. Member for Yeovil has been right. The Prime Minister keeps boasting about the extra money that he has


provided for education, but the right hon. Gentleman is seeking to establish that it will not be available this year. The Prime Minister keeps trying to pretend that he is providing more money for education this year.
I am struck by the change that has overcome Labour Members. My hon. Friend the Member for South Suffolk (Mr. Yeo) referred to the Order Paper wavers during the Budget. Many new Members have not learnt that when a Chancellor delivers a Budget speech, they must wait for the end of the sentence or the end of the next sentence. The way in which the Chancellor manipulated his party and concealed the reality of the Budget had Labour Members cheering his announcement of £1.3 billion for new school building. The Order Papers were waving, and half the Labour Members never heard him say that that would be over the next five years. They did not realise that it was not such a substantial injection of cash as it sounded.
The Prime Minister has been seeking to establish, and the Chancellor has been seeking to persuade his party, that happy days are here again and that the Budget was generous. Yesterday, however, the Prime Minister changed to an earnest assertion that things are terribly tough and that the House must understand that. There is not much Order Paper waving any more.

Dr. Lynne Jones: I am a little confused by the logic of the right hon. Gentleman's argument. Did he or did he not support the provisions made by the previous Government to allow councils to apply for a redetermination of their spending limit? If he did, why is he condemning Somerset council for going through that process, when he accepts that it is operating under considerable spending constraints?

Mr. King: The hon. Lady will understand that I have some background in and knowledge of these matters. I was Minister for Local Government for three and a half years. I have some interest in and understanding of the way in which assessments are made. I made an assessment myself—my own judgment—which proved to be correct, that two years ago we could produce a case that was convincing and could justify and achieve the lifting of the cap. This year, my judgment was that there was no realistic prospect of repeating the exercise and that such a gamble simply could not be taken with Somerset county council taxpayers' money.
The hon. Member for Birmingham, Selly Oak (Dr. Jones) may be impressed by that judgment or think that it was luck, but it seems to have reflected accurately the outcome—the effect of which is that we shall have to rebill the county, and a quarter of a million pounds has been wasted. The county councillors who voted to exceed the cap said, "We thought that we'd have a go." I regarded that as profoundly unwise and I told them so. They were warned of the risks that they were running also by the council's chief officers.

Dr. Jones: Will the right hon. Gentleman give way?

Mr. King: No, I am sorry.
The county council is entitled to expect assistance from the Government because of the extra costs imposed by the Budget that were not provided for in the original local government settlement.
I should like to reinforce the comments on pension funds made by my hon. Friend the Member for South Suffolk. The Minister for Local Government and Housing is right to say that the issue will not arise for two or possibly three years. As we know, however, the impact has already begun to be felt. Comments such as, "Hopefully we can ignore the matter and hope that something turns up when we have to deal with it," are the route to bankruptcy. The Minister rightly said also that the Actuary will not examine the effects until next year. The county treasurer stated:
the Actuary assesses the impact … in 1998 to take effect from April 1999".
I think that the Minister realises that the Government's advice had better change, because it is insufficient. It is manifestly inadequate to pretend that the effects are not being felt—because they are, and provision should be made now to deal with them. Authorities are entitled to hear how the Government will deal with the matter. Ministers seem to be telling authorities, "You will incur the costs and lose the benefits now, and in two years' time we shall talk about what we might do to help you." How can a responsible authority budget in such circumstances?
Changes to pensions are not the only matter with which authorities will have to contend. Most hon. Members do not appreciate that the fuel duty increase, for example, will have a tremendous effect. The Chancellor has shown great skill in managing to introduce tough measures that half the population does not understand. In one year, his fuel duty increase will raise £1.25 billion. Somerset is a rural county and, therefore, has a substantial bill for school transport—which I think that the hon. Member for Somerton and Frome will be able to confirm is £4.8 million. The county will now face an unpredicted 10 per cent. increase in fuel costs.
Moreover, the Budget statement states that 0.8 per cent. increase in inflation will be directly attributable to the Budget, further adding to the Somerset's costs. Since the general election, the county has also had to face three interest rate rises, each of which costs it £270,000. Therefore, to date, the county faces a per annum increase of £810,000 in interest rate costs. Although each of those items might be manageable in circumstances in which Somerset was not against the wire, we now face a situation in which one cost is being piled on to another.
It was abundantly clear that Ministers would not agree to lifting the cap. In the first months and year of a Labour Government, they wanted to build confidence—with statements from the iron Chancellor on the strict control of public expenditure—in their ability to manage the economy. Nevertheless, the public received no warning about removing the advance corporation tax credit, which will increase pension fund costs for Somerset by £2 million. We were told that there would be a quick little Budget to implement the windfall tax, but what did we get? We got a major, completely unpredicted revenue-raising Budget.

Mr. Soames: Will my right hon. Friend give way?

Mrs. Louise Ellman: rose—

Mr. King: I am sorry, but I want to make this point.
I have made my position on capping clear, and I have given advice to the county based on that position. I now find, however, that the Government have imposed costs


that were not mentioned in their manifesto. They gave no indication that they would impose those costs or accelerate duty increases, which usually occur in November, by five months. Somerset faces those additional costs.
Opposition Front Benchers have repeatedly challenged Ministers to contribute to compensation for local authorities so that they can meet the unexpected cost increases caused by the Government's revenue-raising activities. Ministers have not even been willing to respond to those requests, and I think that that is outrageous. Therefore, for precisely those reasons—in answer to the right hon. Member for Yeovil—I will certainly vote against the order.

Mr. Soames: Does my right hon. Friend agree that not only is it a matter of the Somerset ratepayers' position being jeopardised—because of irresponsible and reckless Liberal Democrat gamblers—but the Budget represented an overall assault on Britain's rural constituencies? The Chancellor's reckless smash-and-grab raid on pensions and increase in fuel duty will bear very heavily on rural constituencies. Will my right hon. Friend draw into his remarks not only those irresponsible people in Somerset but rural councils across the land?

Mr. Deputy Speaker: Order. I should hope that the right hon. Gentleman will not discuss councils across the land, because the order deals with only a few councils.

Mr. King: Any rural county council, whether in Somerset or West Sussex, must be concerned by the matter raised by my hon. Friend the Member for Mid-Sussex (Mr. Soames).

Sir Robert Smith: Will the right hon. Gentleman give way?

Mr. King: No, I am sorry.
I will fight for Somerset's interests if I think that a case can fairly be made and won. Sometimes one is disappointed and sometimes one would like to have more money. The challenge will be to achieve proper changes in the area cost adjustment—an issue on which I think that Opposition Members will be able to stand as one.
Yesterday the House held a debate on rural affairs which was attended by four Labour Members—just 1 per cent. of their number. The message I drew from that poor attendance is that grant distributions are about the appeal for resources and the relative requirements of urban and rural areas, of metropolitan districts and the shires and especially of London and the rest. When I was Minister for Local Government, I was told that the only real difference that might be made by the holder of that office was measured in terms of how much he or she did for London. Resources for the other authorities were crucially affected by the determination for London.
I warn other hon. Members from rural counties that we face a battle over the area cost adjustment because the voice of the rural counties is very much smaller in the House than it was. To get a fair share we shall have to fight against the voting mass of Labour Members representing urban interests. This is not a happy occasion for Somerset. I have had some pretty tough things to say

and I regret that we have not been able to stand together, save money for Somerset and work constructively for a better outcome for the county.

Mr. James Plaskitt: I shall be happy to confine my remarks to the order.
I congratulate the Minister for Local Government and Housing on her decision with regard to Warwickshire. That decision is welcome news for my constituents and will be welcomed throughout the whole county. I thank her for receiving our cross-party delegation, and I thank her and her officials for listening carefully to our arguments.
Warwickshire's case arose from the consequences of school reorganisation, as my hon. Friend the Member for Rugby and Kenilworth (Mr. King) outlined in his excellent maiden speech. The council took a bold initiative and certainly demonstrated leadership in embarking on a school reorganisation that involved the closure of 24 schools and the removal of 10,000 surplus places. It was an extremely effective operation and showed other local education authorities, which may in due course have to face the same problem, how it could be dealt with. Not to have conceded Warwickshire's case would have gent a very unfortunate message, not only to the schools in my county but to all local education authorities which will need to deal with surplus places in due course.
There should not be a financial penalty for carrying through an efficient and effective reorganisation of schools, yet the way the capping rules are drawn means that such a penalty does or could exist. Because Warwickshire's spending is slightly above its standard spending assessment, the capital financing charge arising from the reorganisation was not automatically reflected in the cap. Listening to Warwickshire's entreaties, my hon. Friend the Minister saw the absurdity in that aspect of the capping regime and, accordingly, allowed Warwickshire's budget. That decision means that people in my constituency and throughout the county will see the benefit of the Government's commitment to education, but the story is very different in Oxfordshire.
I very much regret that my hon. Friend the Minister decided in the end to impose the cap on Oxfordshire. I served on that authority for 12 years and was one of its leaders for six years. I can assure my hon. Friend the Member for Brent, East (Mr. Livingstone) that he should not be fooled by the suit because I was certainly no Derek Hatton. The six years that I spent leading that authority were characterised by the fact that we had to set budgets that inflicted savage cuts in the whole range of services provided by the county council, all as a result of the capping regime.
In recent years, I was part of several delegations to the Department of the Environment and argued Oxfordshire's case with the previous Government. They were cross-party delegations; indeed, the hon. Member for Wantage (Mr. Jackson) accompanied me a number of times. We were grateful for his support.
The current set-up imposes a cap when increases are deemed to be "excessive", as it says in the regulations. It is absolutely impossible to argue that any part of Oxfordshire's budget can be characterised as excessive. In per capita terms, Oxfordshire is the lowest-spending


county council in the country. Its cap is set at 1.3 per cent. above SSA, whereas the average is 2.4 per cent. At the capped level, the increase in Oxfordshire's council tax will be just 2.4 per cent., the lowest of any county council in the current round.
The council has gone a long way to try to meet the provisional cap. This year, it has already imposed cuts totalling £10 million on a wide range of services. They are very harmful cuts, but they still leave the authority with a budget provision £6 million above the provisional cap. That is on top of cuts of more than £60 million over the past six years.
The order will impose a further £6 million-worth of cuts which will hit all services. Where does that leave the education service in Oxfordshire? Thirty-two per cent. of primary children are already in classes of more than 30, which is twice as many as two years ago; 280 teaching posts have been cut in the past four years, and more are now under threat.

Dr. Lynne Jones: Does my hon. Friend agree that the order is hardly in line with our manifesto which contained a pledge to reduce class sizes to under 30?

Mr. Plaskitt: I am grateful for that intervention; I was about to make precisely that point.

Mr. Robert Jackson: It was always a pleasure to work with the hon. Gentleman in trying to get some sense out of the previous Government. Indeed, we succeeded in doing so last year. The hon. Gentleman is making a helpful speech on behalf of Oxfordshire, but I hope that he will answer the Minister's criticism of the way the county spent the £3.5 million that was agreed by the Conservative Government last year. He was the leader of the council and made decisions about the spending of that money. The Minister was critical of how it was spent, so I hope that the hon. Gentleman will take this opportunity to answer her accusations.

Mr. Plaskitt: The help, as the hon. Gentleman regards it, came in the form of credit approvals and was very much a temporary respite.
The measures that the Government have introduced are beginning to channel extra money into Oxfordshire for education. They are, of course, extremely welcome, but they are only a trickle when compared to the gaping hole in the bottom of the bucket which is caused solely by the impact of capping. It might be said that councillors in Oxfordshire could protect schools by making cuts elsewhere, but any cuts to fill the gap would have to be very savage and would affect the most vulnerable people. Therefore, if the order is passed, schools will be hit again. It is impossible to justify that when the alternative would have been to allow the public in Oxfordshire to choose to have an average council tax increase in order to maintain decent funding levels for their services. It is an indefensible situation, and, as my hon. Friend the Member for Birmingham, Selly Oak (Dr. Jones) pointed out, it is a real brake on our ability to advance the cause of education in that particular county.
The whole problem stems from the capping regime itself. It is, and in my view always was, incompatible with local democracy, and it must be abolished. I welcome the

Government's commitment to move towards its eventual abolition. Those of us who have over the years campaigned vigorously against capping are not asking for a local government spending free-for-all. That is not the alternative to the abolition of crude capping. I am convinced that local authorities across the country are fully willing to play their part in the control of public spending, but the issue must be dealt with by mechanisms that are compatible with decentralising power and reinvigorating local democracy.
When my hon. Friend the Under-Secretary winds up, I hope that he will be able to give me and local authorities up and down the country reasons to hope that work is in hand, that consultations are under way and that we can anticipate as speedy a demise as possible of this discredited and damaging mechanism.

Mrs. Jackie Ballard: I welcome the Government's decision to sign the European charter for local self-governance. I also welcome the announcement that they are committed to ending the capping of local authority budgets, although we do not yet have a timetable. I, too, welcome the decision to accept Warwickshire county council's appeal.
I am pleased to support the statement made by the right hon. Member for Holborn and St. Pancras (Mr. Dobson) in the House just five months ago that
The incoming Labour Government will be based on the supposition that democracy depends on the people who take the decisions carrying the can and the people who carry the can taking the decisions."—[Official Report, 3 February 1997: Vol. 289, c. 701.]
I am a generous person, but I am afraid that that is all that I can welcome today. Today is a sad day for local democracy and must be the day when the honeymoon wears off and the local government bride and central Government groom start arguing about more serious matters than which end of the toothpaste tube to squeeze.
The Minister spoke earlier about increased partnership between local and central Government. It is a strange partnership when one partner tells the other how much they can spend. It is a recipe for marital disharmony if ever there was one. No wonder that even the Labour-controlled Local Government Association has started to criticise the Government.
Squeezing the toothpaste tube is a suitable analogy because, over the past few years of Tory government, local authority budgets and services have been squeezed from every possible direction. They have been squeezed so much that there is no waste left and no overblown bureaucracies to cut. There are scarcely any non-statutory services such as the youth service or discretionary grants left to cut. Even if the Government jump up and down on the toothpaste tube, nothing more will come out. Yet the Red Book figures show increasing misery over the next two years for local government—misery that this Government seem determined to continue.
As many hon. Members have said, today's debate is not about local authority funding in general. It is about the Government's proposal to override the will of local electors and impose a cap on the spending of two authorities. It will be a huge disappointment to many, not only in Somerset and Oxfordshire.
Why are the Government imposing caps on spending? Does the Labour party think that central Government know best on local services? Are the Government philosophically in favour of central Government taking away the powers of local councils? I have searched for the answers to those questions and have found that, during the same debate last year, the Minister for Local Government and Housing said:
The Government are so obsessed with ideological dogma that they are breaking their commitments on spending and on capping. They have demonstrated that, far from being in control of local government finance, they have lost sight of reason. The Government are acting against the wishes of the people of Oxfordshire and Cambridgeshire. The people want the opportunity to fund their schools and social services properly".—[Official Report, 22 May 1996; Vol. 278, c. 358–59.]
One year later, the names of the Ministers have changed and the name of one of the councils on the capping order has changed, but nothing else has changed—not the ideology, not the dogma and not the determination to ride roughshod over the wishes of local people.
Education, education, education—as my right hon. Friend the Member for Yeovil (Mr. Ashdown) said in the Chamber yesterday. Forcing two councils to sack 140 teachers is not the way to show a commitment to education. However, education is not the only issue, important though it is. Social services are also important, providing vital care for the elderly and children. Those services will suffer in Somerset and Oxfordshire if the cap is confirmed this evening.
The main Conservative excuse for capping was that it protected the public from outrageous increases in local taxes. Somerset and Oxfordshire had local elections on 1 May and similar administrations to those that had been in place before were returned—a balanced council in Oxfordshire and a majority Liberal Democrat administration in Somerset. The public clearly did not want protecting from this year's council tax increases. Today's decision will save the average council tax payer in Oxfordshire £28 a year, and in Somerset £20 a year. The people of both those counties showed clearly that they had the will to spend that small amount extra to protect the services that they value.
My hon. Friend the Member for Oxford, West and Abingdon (Dr. Harris) has spoken before about the Oxfordshire settlement. I hope that he will be able to speak about it again tonight. He pointed out that the decision to set a budget above the cap level in Oxfordshire had all-party support. In Somerset, the decision had the support of Liberal Democrat and Labour councillors. As we heard earlier, the Conservative councillors abstained.
The decision is not about protecting council tax payers or listening to the will of the electorate. Perhaps the Government think that the two councils have transgressed by appealing against their cap limits. From the speech of the right hon. Member for Bridgwater (Mr. King), we might believe that they had, but the rules for capping are in place and there is a procedure for appealing. As part of that procedure, even Conservative Ministers would listen to the cases put forward by the few councils that appealed in any year.

Mr. Brian White: Does the hon. Lady accept that those of us who set budgets in

this year's local authority round knew the consequences of going above the cap? Most of us took that into account when setting the budgets.

Mrs. Ballard: All councils knew when they set their budgets that there was an appeal mechanism and that, if they had a strong enough case, they could put their appeal to the Minister and hope that it would be listened to objectively.
This year, only three councils appealed, because they believed that they had a case that the Minister would listen to. Together with my right hon. Friend, sorry, my hon. Friend the Member for Somerton and Frome (Mr. Heath)—he will be right hon. one day—I was one of the councillors who voted to set a budget above the cap limit. That was not an indulgent or wayward political gesture. It was done in the full knowledge that, if an eventual appeal failed, the cost of sending out new council tax bills would add to the cuts needed to reduce the budget to the cap level. It was also done in the full knowledge that local elections would take place within a few weeks of the bills being sent out. I know that some Labour Members voted in the Oxfordshire decision.
Legally and technically, councils are allowed to appeal. The right hon. Member for Bridgwater said that he knew that Somerset's case would fail. How could he know? The Minister had to listen to each case and judge them on their merits. She could not fetter her judgment in advance—that would not be allowed.

Mr. Robert Jackson: I agree with the hon. Lady. The fact that they are merely implementing the previous Government's policies makes nonsense of the Government's case. There is an appeal mechanism. The appeal has been made and has not been heard.

Mrs. Ballard: I find it hard to believe that the Secretary of State thinks that his predecessor was so infallible that he could not have been wrong on Oxfordshire or Somerset. My hon. Friends the Members for Oxford, West and Abingdon and for Somerton and Frome have spoken in detail in Adjournment debates about the cases of the two counties. Neither council is spendthrift or inefficient. Somerset's budget is 1.2 per cent. above its cap limit and the cap was set at 2 per cent. Oxfordshire's budget is 1.7 per cent. above the cap. As we have heard, it is the lowest-spending county in the country.
Somerset county council has an unrivalled record of efficiency and prudence. No aspects of its spending are over the top, except, of course, that it spends £12 million more than its education SSA. Is that spent on costly county hall bureaucracy? Is that where the cuts can be found? No. Somerset has the lowest administrative costs of any authority in the country—£9.29 per child. Some authorities spend more than £120 per child. Somerset devolves the highest proportion of spending to schools. The Minister said that she took account of Warwickshire's actions to remove surplus places yet, although Somerset already has the lowest proportion of surplus places in primary schools, it is to be punished today.
As the Minister admitted in the Adjournment debate on 12 June, Somerset's education SSA is low compared to that of other counties; it is 33rd out of 35 counties. The Minister then said that Somerset was lucky because


its highways maintenance SSA was in the top 20. She knows, however, that more than 60 per cent. of a county council's total budget is spent on education so, if its education SSA is low, the shortfall cannot be made up from other services. Indeed, any road user in Somerset will tell the Minister about the parlous state of our roads. Perhaps she would like to see them for herself and at the same time visit some of our schools to explain to them why this Government, in common with the previous Government, feel that our children are worth so much less than children in Westminster or Buckinghamshire.
Somerset's social services are equally prudent. It was one of the first counties to externalise its residential care service and it was the first to have externalised domiciliary care. Many Liberal Democrat councillors—I was one of them—were unhappy about being forced down those routes and were also unhappy about the recent decision to externalise the highways service, but those decisions have saved council tax payers money and have protected local jobs.
There is no spare money in Somerset, there are no reserves to dip into and there are no uncommitted rainy-day funds. Confirming the cap will mean larger class sizes in schools, fewer social workers and less care for the elderly. Clearly, this evening's vote is not about protecting services and it is not about protecting local taxpayers from council tax increases. I believe that it is about firing a warning shot at Labour-controlled councils for next year. The Government trust them so little that they are prepared to see teachers sacked and elderly people go without care in order to flex their muscles and to show local government that they will not be a soft touch in future. Far from being a soft touch, they will be as much a bully as the Conservative Government were.

Mrs. Ellman: Does the hon. Lady not recognise that this Government, in the relatively few weeks in which they have been in power, have already made more funding available for schools and for essential house building? They have already made plans to start to get our young people and the long-term unemployed back to work. After 18 years of decay under a Conservative Government, watched over by Liberal Democrats who, in their own patches, have done very little better than the Conservatives, praise should be given to this Labour Government for making a new start on the long road to recovery.

Mrs. Ballard: The Government have done nothing this year for local services and they have given crumbs for next year. We have already heard about the hole in the finances which has been unearthed by the Liberal Democrats, and the Conservatives have now jumped on the bandwagon. Local government will be very little better under this Government than it was under the Tory Government. This year, it will be no better off. Tonight, the hon. Member for Liverpool, Riverside (Mrs. Ellman) has the chance, if she really believes in protecting local services, to vote against the capping order.
This decision will dismay and anger many people across the country who expected better from a Government who were so eager to sign the charter for

local self-governance and who have such a large local government base. So many Labour Members have local government experience.

Mr. Livingstone: Will the hon. Lady give way?

Mrs. Ballard: I will give way to one such Member

Mr. Livingstone: There may be some confusion after the intervention by my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman). Does the hon. Lady agree that this order is not prompted by anyone asking for extra Government money? The authorities concerned are saying, "Please allow us to spend the money we have already collected on services that are vital." The order cannot be part of Government policy unless people think that, by cracking down on the two councils concerned, they will give a warning to councils throughout the country to restrain their spending in the coming year. Labour Members who are offering comfort to this Government policy may be stabbing their own constituents in the back later on.

Mrs. Ballard: I could not have put it better than the hon. Gentleman. People knew that the Conservatives had given up on local government, but they expected better from Labour. Capping is wrong in principle. That is a view that my party has always held and I thought that the Labour party held it too.
After tonight, the young, the old, the weak and the disabled will bear the brunt of the Government's macho muscle flexing. The Liberal Democrats will vote against the order. The hon. Member for Brent, East (Mr. Livingstone) and other Labour Members will be most welcome to follow their conscience and to vote with us. They should ignore the fact that Conservative Members are doing a strange about turn. They, too, are welcome in the Lobby. There can be no doubt that the people taking this decision are the members of this Government. They must carry the can for the damage to services in Somerset and Oxfordshire as a result.

Mr. David Crausby: I thank you, Mr. Deputy Speaker, for allowing me the opportunity to make my maiden speech in such an important debate. I served and, indeed, suffered, for 13 years as a local councillor under the previous Government, with all that capping meant, so I am pleased now to be able to say that I am the first Labour Member of Parliament for Bolton, North-East. I have been joined, I am delighted to say, by my hon. Friends the Members for Bolton, South-East (Dr. Iddon) and for Bolton, West (Ms Kelly) to make Bolton truly a Labour town.
Some 85 per cent. of my constituency was previously represented by Peter Thurnham and the other 15 per cent. by Tom Sackville, so I am responsible in part for the replacement of two Conservative Members of Parliament. I understand that both were diligent and hard-working Members. Peter Thurnham was a man of independent mind and felt that he had been poorly treated by the Conservatives. In the end, he decided to join the Liberal Democrats so I like to think that I am responsible for replacing a Liberal Democrat as well. I have some sympathy for Peter Thurnham's view that he was badly


treated by his party because after all, most of the country felt the same way about how they were dealt with by the Conservatives, which is why the previous Government were swept from power.
Peter Thurnham and Tom Sackville were preceded by two excellent Labour Members, David Young and my right hon. Friend the Member for Dewsbury (Mrs. Taylor), as she now is. They represented Bolton well when it was the barometer town which decided general elections, before the boundary commission changed everything.
Bolton, North-East is an ideal mix of town and countryside. There are also some stark economic contrasts in the constituency which so much mirror the divisions that most of us have experienced nationwide over the past 18 years. Bolton was the heartland of the industrial revolution and has suffered more than most, as a result, from the decline of Britain's industrial base. Samuel Crompton was born in Bolton. He cleverly built on the skills and knowledge of local people to make it all happen in Bolton. It could all happen again because we still have a fine tradition of highly skilled tradespeople. Unhappily, too few of them survived the absurd economic experiment of the early 1980s which was perpetrated by the more extreme elements of the previous regime. We witnessed a real crime when we saw the destruction of more of Bolton's industry than had been caused by two world wars. The great challenge that the Government face will be to repair the damage that was done in the 1980s.
We shall be able to repair that damage only if we use the energy and expertise of local people and local politicians. Central Government spent too many years treating local politicians and local government as if they were the enemy. Bolton was represented throughout those difficult years by a Labour council, which delivered, as it continues to deliver, efficient services against the odds.
There is a desperate need to avert the annual round of cuts in services. We clearly need a radical review of funding and, more importantly, a new relationship with our local politicians who do such good and important work. They will be the rock on which we will build a better society and they must be allowed to govern locally.
I was lucky to serve my apprenticeship in the engineering industry in the 1960s. I want today's young people to be offered the same employment opportunities that I had—not just because young people deserve the chance to earn a decent living in order to bring up their families, but because the country needs skilled young people to provide the wealth that our great nation is so capable of achieving.
I am proud to be an engineer and a committed and active trade unionist, having been brought up in that family tradition. I was elected to represent the largest factory in my constituency, where I have been the works convenor for the past 18 years. I spent much of my time trying to persuade that private employer to improve the company pension scheme, despite the fact that there had been many years of contribution holiday. I am not surprised that my right hon. Friend the Chancellor took action on pensions. In my view, there is a great deal of scope to do more. I intend to represent my constituents with the same tenacity that was required in my previous job.
Bolton, North-East and its people have a fine industrial history, and with the right industrial policies intelligently applied together with the active support of local

government, we shall have an even better industrial future. Not only do we have good prospects and three Labour Members representing Bolton; we have a newly promoted premiership football team, Bolton Wanderers. Thanks to the assistance of the local council, the Wanderers now have a brand new football stadium.
For Bolton, 1997 was truly a great year. All we need now is university status for the Bolton institute of higher Education and our year will be complete. We have much to look forward to in our town because our people are the real strength of our community and I am deeply honoured to represent their cause in Parliament.

Mr. Tony Baldry: I congratulate the hon. Member for Bolton, North-East (Mr. Crausby) on a first-class maiden speech. I am sure that we shall hear him again on many future occasions and he spoke clearly and eloquently. Obviously, Conservative Members were sorry to see Tom Sackville go. Many of us were close friends with Peter Thurnham and were sorry to see him go, but, as far as we were concerned, he went rather earlier than the general election.
I have many happy memories of visiting Bolton when I was a Minister in the Department of the Environment. I was most impressed by Bolton council and I was pleased to be the Minister who gave planning permission for Bolton Wanderers to build its present stadium. The other day, when I was in Bolton, I was delighted to see what a wonderful edifice it turned out to be. I hope that the hon. Gentleman will consider inviting a few Opposition Members to watch some of its matches.
I hope that the hon. Gentleman will also invite the Minister for London and Construction to see the work that Atkins is doing in Bolton, building the wonderful millennium structure that will be in the hon. Gentleman's constituency very soon. However, I shall be in trouble if I talk about Bolton for too long. As I am the first hon. Member to talk about Oxfordshire, let me refer in some detail to the order.
I have some sympathy with the Minister for Local Government and Housing. I fully appreciate that as local government takes up a quarter of all public spending, one has to be reasonable in these matters. Clearly, the hon. Lady has a broader duty to governance, and those of us who have had to deal with these matters have some understanding of that.
One has to look at the past to understand why Oxfordshire has got itself into its present financial pickle. Until the mid-1980s, Oxfordshire had a Conservative administration. From 1982–83 to 1985–86, the average growth in the county council's budget was 3.4 per cent., while the average growth in inflation was nearly 5 per cent. Oxfordshire then became a hung council and in the next four years, under a Labour-Liberal Democrat coalition, it went on a spending bonanza. The average growth in the council budget was nearly 12 per cent. when the increase in inflation was about 6 per cent. That spending bonanza continued until 1992–93, when Oxfordshire county council's budget increased by nearly 7 per cent. and inflation increased by only 2 per cent. There was a considerable increase in spending until the early 1990s.
Eventually, that level of expenditure became unsustainable and the county started to run into its present difficulties. In order to maintain its spending, Oxfordshire


spent all its reserves and began to get into difficulties with the capping regime, with all the financial gearing that that involves. Oxfordshire is in the rather unique position of being the only local authority that has sought to break the cap last year and this year. As we have heard, the then Secretary of State listened to the representations that Oxfordshire county council made last year and enabled it to find a way through.
This year, Oxfordshire again set a budget above cap. Between November 1996 and 1 May, my hon. Friend the Member for Wantage (Mr. Jackson) and other hon. Members representing Oxfordshire constituencies, including myself, and Oxfordshire county council had numerous discussions with the then Minister of State for local government, my right hon. Friend the Member for Skipton and Ripon (Mr. Curry).
We put our case on the basis that Oxfordshire had got itself into a pickle and somehow had to get out of it. The position was made worse because Oxfordshire had no reserves to fall back on and no means of finding resources elsewhere. It is fair to say that my right hon. Friend the Member for Skipton and Ripon, in so far as he was able—one recognises that Ministers are always bound by the danger of being taken to judicial review if they are too incautious in what they say—suggested that if a Conservative Government had been elected on 1 May, they would have been sympathetic to Oxfordshire setting a budget above cap.
The Minister for Local Government and Housing may smile, but we also need to know what the Labour party said to Labour councillors before the general election. This year's budget in Oxfordshire was rather curious in that it was set by a combination of Labour and Conservative county councillors. One can only assume that, in the run-up to the general election, Labour county councillors in Oxfordshire would take some advice from their party as to their position if Labour won the general election. One can only assume that they, too, were given some comfort; otherwise, they would not have set a budget above cap.
Indeed, the Labour group on Oxfordshire county council cannot see any way forward other than the Government allowing Oxfordshire to continue at the budget that it has set. Only yesterday, the leader of the Labour group of Oxfordshire county council wrote to hon. Members representing Oxfordshire stating that
this council needs a clear medium-term financial plan … if it has any chance of steering itself away from imminent bankruptcy.
We also heard from the hon. Member for Warwick and Leamington (Mr. Plaskitt), who used to lead the Labour group on the county council until 1 May. In his view, Oxfordshire had set a responsible budget this year, having regard to all the circumstances.

Mr. Robert Jackson: Did my hon. Friend note that, when I asked the Minister to give a categorical assurance that she had not entered into undertakings with Labour councils before the election, she refused to do so and dismissed the suggestion as an idle rumour?

Mr. Baldry: That clearly needs to be addressed at some stage because there had to be—and were—discussions between the Labour group on the county council and the

national Labour leadership. One would hope that the Labour party nationally would have recognised that the Labour group on the county council had been party to the budget setting.

Dr. Harris: Will the hon. Gentleman give way?

Mr. Baldry: No, I shall not because I am very conscious that time is pressing on. I suspect that the hon. Gentleman will want to speak, as do other hon. Members.
Oxfordshire county council now finds that it will have to make some very substantial cuts over the next few weeks—against the background of being the lowest-spending county in the country. The proposed cap allows Oxfordshire to spend just 1.3 per cent. above its standard spending assessment, compared with an average of 2.4 per cent. for all other county councils. At the moment, the local authority is not spending profligately.
I find the position of Ministers somewhat curious, as others have said. During the debate this time last year, the Minister, who then led for the Opposition, congratulated Oxfordshire on its spending and said:
Oxfordshire comes 45th out of 47 counties for total expenditure per head. It spends £560 per head … The county average is £629 … The Government are acting against the wishes of the people of Oxfordshire … The people want the opportunity to fund their schools and their social services properly, but they know that the Government will manipulate the figures to ensure that they cannot do that. That is not good enough."—[Official Report, 22 May 1996; Vol. 278, c. 358-59.]
It was unclear from the hon. Lady's speech today that, last year, she and her colleagues on the Labour Benches supported Oxfordshire in its claim to be allowed to spend moderately above its cap.
The situation this year is almost exactly identical, so I am at a loss to understand—I think that people in Oxfordshire will be at a loss to understand—why the Labour party is doing a volte-face and imposing a cap on Oxfordshire, which will inevitably lead to redundancies among teachers, the closing of libraries and the deterioration of personal social services, such as home helps, meals on wheels, and so on. I could understand if the hon. Lady had displayed financial rigour last year, but, given her comments, which are clearly recorded in Hansard, and given the voting record of Labour Members last year, I cannot.
What has changed since last year that has caused the Labour party to do a complete turnaround on this issue? The people in Oxfordshire will want to know, especially as they recognise that a substantial part of the reason why Oxfordshire is in a financial pickle is that Labour and Liberal Democrat councillors drove up spending in the late 1980s and early 1990s without, sometimes, any great benefit from the increased spending. Now that we have got into difficulties, the Labour party is doing a runner.
I therefore very much hope that, when people in Oxfordshire start to see the deterioration of services, they will recognise that it has come about because of the Government's actions—not only capping Oxfordshire but, since the election, increasing inflation, putting up interest rates three times and lumbering the county with an extra bill of £2 million for pensions. All that will mean that providing services in Oxfordshire will be very much more difficult.

Mr. John McDonnell: The genesis of this debate goes back 13 years to the introduction of rate capping under the Thatcher Government. It was introduced to cut public expenditure under monetarist economic theory and in an attempt, for short-term political expediency, to deliver tax cuts as a bribe before the election.
The Labour party, the Liberal Democrats and all progressives opposed the capping legislation, basically for two reasons. First, we opposed it because we concretely believed that central Government limitation of local expenditure would result in cuts in services to local communities. Secondly, we opposed it because it was the first time in this country that central Government were to take control of local government expenditure, thus weakening the concept of local democracy. We felt that that was a loss of basic civil liberty.
We have been proved right; such arguments were proved right throughout the 13-year period—even from the earliest stage. Year on year, capping has resulted in the forcing downwards of local public investment. It has meant the rundown of local services—cuts in education, environmental health and social services. It is a major contributory factor to the loss of teachers, the lack of investment in equipment, the inability to care for those most in need and the ability to maintain decent modern services on which all our communities rely.
The effects on our communities are self-evident. A generation ill taught is educationally lagging behind our European and international competitors. On estates in urban areas, Thatcher's children are coming out to play, with increased crime, drugs, violence and incivility. There has been a deterioration of basic municipal facilities which were established by previous generations of local councillors. That is why the Labour party consistently for 13 years held a clear and firm position in opposition to capping.
I was enthused by the Labour party's record and speeches of Labour party spokespeople during those 13 years, as they outlined the iniquities of capping and the commitment to abolish it once Labour was elected. Let us run through some of the forensic evidence of those commitments—just in recent years.
In 1993 in a statement to the party conference, the speaker from the national executive committee said:
How can the Tories justify laying new responsibilities on local authorities … and at the same time cap their attempts to ensure proper funding for the task?
In 1994, the shadow spokesperson for the environment said at the Labour party conference:
Along with our plans for elected regional councils, my friends, we shall be giving back responsibility to local communities as well. We are going to take the shackles off local government. We are going to end capping and compulsory competitive tendering.
The comments go on.
In 1995, the conference carried overwhelmingly a resolution which said:
Conference recognises the constraints on local authorities placed by the current system of local government finance.
It said that the conference
notes and reaffirms the existing policies to remove the cap".

Also in 1995, we issued our policy statement on local government, in which we said:
Under the Tories, the government hasn't just taken increasing control over the money which councils need to raise. It has also taken detailed control of the amount that councils can spend.
But the present capping arrangements suggest that some civil servant or minister in Whitehall knows better than local people and local councillors about the depth, degree and urgency of the needs of each and every local community and its capacity to pay for what it needs. This can't be right—in principle or in practice.
I was especially enthused by the speech of my right hon. Friend the leader of the Labour party at our conference in 1995, in which he said:
A young country shouldn't be frightened of such change. It will strengthen Britain. The only thing that threatens the Union is a government that refuses year on year to listen to the people. We will rebuild local government and end the muddled system of rate capping.
In 1996, we published "New Labour New Life for Britain" and, in 1997, we published our election manifesto—both of which included a commitment to end capping.
For more than a decade, we have been preparing for power and, in that preparation, we have been clearly committed to scrapping the capping regime. Therefore, it is with extreme concern that I say that, with the first order on local government revenue, we are about to enforce capping—unreformed, unreconstructed and unrelenting.
The same arguments that led us to make the speeches, applaud the leadership statements and vote for the resolutions over the past 13 years apply today. I was convinced then by what the party said and I remain convinced. In all honesty, with all integrity, I cannot support the Government in the Lobby to cap councils. I do not do so lightly. I come from a tradition of democratic centralism and I believe that when a democratic decision is made in a party, the members and representatives should adhere to it. That is what I am doing. I am adhering to the policies determined democratically by the majority of the party. Why is that so important for us? It is because it strikes at the heart of internal party democracy in the Labour party and also at our concept of socialism.
In 1996, we adopted a statement of Labour's values, entitled "Socialist Values in the Modern World". It said:
This core belief in the power of community to liberate the individual is the oldest and most enduring basis of socialism. Even before Keir Hardie led the Independent Labour Party in the 1890s, people in Britain and abroad came together to argue for the use of collective power—through political parties, trade unions, local authorities … to attack privilege and domination and advance the individual interests of the majority of people.
Those are the values we adopted then. Capping is an element, no matter how small, in undermining that power of the community and, therefore, cannot be supported.

Mr. Yeo: I shall comment briefly on what has been an excellent debate about a crucial subject. The debate featured two maiden speeches of high quality. The first was from the hon. Member for Rugby and Kenilworth (Mr. King), who gave an eloquent description of his constituency and an interesting account of his work in removing surplus school places. Unfortunately, he did not give a great place in his speech to the achievements of


Rugby school in inventing an important new British export, but I am sure that the House looks forward to hearing again from him.
The second maiden speech was from the hon. Member for Bolton, North-East (Mr. Crausby), who spoke enthusiastically about the role of manufacturing in his constituency and the achievements of Bolton Wanderers. I share his hopes about job prospects for his constituents in the future and I am sure that the House also looks forward to hearing from him on other occasions.
My right hon. Friend the Member for Bridgwater (Mr. King) relentlessly exposed the failings of the Liberal Democrat-controlled Somerset county council. He also renewed his credentials as an independent and powerful defender of his constituents' interests and, importantly, of the rural community as a whole. He rightly pointed out that the countryside is less well represented in this Parliament than in previous ones, at least those in which I have served.
The hon. Member for Warwick and Leamington (Mr. Plaskitt) convincingly demolished the case for capping Oxfordshire county council, of which he is a former member. With the assistance of an intervention from the hon. Member for Birmingham, Selly Oak (Dr. Jones), he underlined the importance of early notice from the Government of their intentions on the replacement for capping.
The hon. Member for Taunton (Mrs. Ballard) pointed out that much of what the Government have said on capping today and in the past few days has been meant as a warning to Labour-controlled councils that might have been deluded enough to believe that the Labour party election manifesto meant what it said when it referred to the abolition of capping. My hon. Friend the Member for Banbury (Mr. Baldry), who has temporarily left his place, underlined the illogicality of the Minister's arguments. He also emphasised the additional burdens that Oxfordshire county council now faces and which I mentioned earlier.
The hon. Member for Hayes and Harlington (Mr. McDonnell) pointed out that, two years ago, even the Prime Minister gave an unequivocal pledge on capping. I salute the hon. Gentleman's intention to vote against the Government tonight. That is a brave gesture and I hope that I will not put him off by saying that when I did the same myself, as a new Member, it took me a long time to recover from the damage to my career in the eyes of the Whips. Nevertheless, I applaud his stance on such an important issue of principle.
Two clear conclusions have emerged from the debate. First, the Government must clarify their intentions on the timetable for ending capping and on its replacement. They must tell us what the new regime will mean at an early date if damaging uncertainty and confusion are not to plague the important decisions that councils have to take when they set council tax levels next year and the year after.
Secondly, the urgency of the need for clarification of the Government's intentions has been enormously increased by the time bomb that is now ticking away. It was introduced by the Chancellor of the Exchequer in his smash-and-grab raid on the pension funds, and it will seriously affect all local authorities. I hope that the Under-Secretary, when he winds up, will at least

acknowledge the existence of that problem and the importance of responding to it sooner rather than later. That alone would be a considerable advance on the Government's position so far. I hope that he will shed some light on those two important issues.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford): We have had an interesting debate which has ranged widely. The hon. Member for South Suffolk (Mr. Yeo) has spoken twice. On the second occasion, the level of support for him on the Conservative Benches was significantly lower than on the first. Being charitable, I hope that that was not a reflection on his colleagues' view of his oratory or the force of his argument. In his first attempt, the case he put was relatively weak, but he compensated for that by the force with which he expressed it. He reminded me of the advice given to a young politician who was nervous about the force of his argument. He was told, "If you have a weak case, shout loudly."
The hon. Member for South Suffolk made a number of points and I shall seek to address them. He asked about the changes to advance corporation tax, although he was stretching it, in a debate on council tax caps in 1997–98, to drag in that measure, which will not come into effect until 1999–2000. The impact of Budget changes on local authority pension funds cannot be known until after the revaluation that is due after March 1998. That revaluation will decide any changes that authorities must make to their contributions to the funds. Those changes will necessarily take account of all factors affecting funds, including, for example, early retirement. The new level of contributions will not affect local authority budgets until 1999–2000.

Mr. Yeo: Will the Minister confirm that the income received by local authority pension funds will be lower, from the date of the Budget, because of the change in the tax treatment of dividends received by all pension funds and that, therefore, the income of those funds will be substantially reduced?

Mr. Raynsford: No, a number of different factors will affect the income that pension funds receive and, until the revaluation is made after March 1998, local authorities will not know what deficit—if any—they will have to cover. Therefore, it is not possible for them to make any provision currently as the hon. Gentleman suggests. That is not a relevant factor to the order.
The second issue that the hon. Gentleman raised was the review of standard spending assessments. He asked for an indication of the changes that the Government might make. He is an experienced Member of Parliament and he knows very well that Governments review the options until they reach a conclusion, at which point they share their thinking with the House. We are considering with local government representatives the range of possible changes that have been suggested. We will reach a preliminary view in the autumn about which changes should be made, we will consult local government in the autumn and we will then bring a report before the House in the new year to implement any changes that we propose. That is the timetable that has been followed in previous years, as the hon. Gentleman will know.
Finally, the hon. Gentleman asked about the implementation of our manifesto pledge to end crude and universal capping. As my hon. Friend the Minister of State made only too clear at the outset, we shall make those changes at the same time as we introduce the replacement scheme, based on best value and local performance plans.
My right hon. Friend the Chancellor of the Exchequer said in his Budget statement that we would review future arrangements for local authority finance, but that we would retain capping for 1998–99, while putting in place measures to improve local accountability that will allow us to fulfil the manifesto commitment. It was right for us to take an early opportunity to let local authorities know the position, so that they could plan accordingly.
My hon. Friend the Member for Rugby and Kenilworth (Mr. King), in an impressive maiden speech, paid tribute to his predecessors and to his constituency. Appropriately, he referred to education reorganisation in Warwickshire, which he described as painful but right. I appreciate his kind words about the handling by my hon. Friend the Minister of State of the case put to her by Warwickshire for the relaxation of the cap.
The right hon. Member for Bridgwater (Mr. King) made the fair point that there was no doubt about the new Government's commitment, made clear in opposition before the election and made clear again after the election, to stick to the inherited local government settlement this year.

Mr. David Heath: rose—

Mr. Raynsford: I was talking about the speech by the right hon. Member for Bridgwater. I trust that the hon. Member for Somerton and Frome (Mr. Heath) will have the courtesy to listen to my response to what was said by another Member from his part of the country.
The right hon. Member for Bridgwater made that valid point, and recognised the fact that there was no prospect of Somerset county council's being immune from the impact of the cap. He then became involved in a private altercation with Liberal Democrat Members from that county, into which I do not feel that I should intrude, so I shall pass on to the comments of my hon. Friend—

Mr. Heath: Will the Minister give way?

Mr. Raynsford: No, I will not give way to the hon. Gentleman.
My hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt) expressed appreciation of the Minister of State's decision in respect of Warwickshire, but expressed concern about the position in Oxfordshire, an authority with which he has had considerable involvement. Indeed, I believe that he was leader of the county council for a time.
My hon. Friend suggested, as have some other hon. Members, that Oxfordshire is the lowest-spending county per head—a factor that he thought should justify special treatment. I have to tell him that spending per head is not in itself the best measure of need to spend. Standard spending assessments are designed to provide that other measure, and using SSA comparisons, which make allowance for the different circumstances in each authority, Oxfordshire spends more than 13 other counties.
The hon. Member for Taunton (Mrs. Ballard)—

Dr. Harris: Will the Minister give way.

Mr. Raynsford: I am afraid that, as the hon. Gentleman knows, this is a very short winding-up speech. I have less than five minutes before the debate has to end, so I regret that I cannot.
The hon. Member for Taunton argued that Somerset and Oxfordshire should be able to spend respectively £6 million and £3.4 million above cap. However, as was pointed out in an intervention by my hon. Friend the Member for Milton Keynes, North-East (Mr. White), many other local authorities have faced similar difficulties, yet have managed to set budgets within the cap limits that they knew would apply this year.
In response to an intervention by my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman), the hon. Member for Taunton claimed, incorrectly, that the Government were making no additional finance available to local authorities this year. She must be aware of the Local Government Finance (Supplementary Credit Approvals) Bill which has begun the process of honouring our policy of releasing capital receipts. Those will be available as finance to local authorities in the current year.

Mrs. Ballard: Will the Minister give way?

Mr. Raynsford: I was simply correcting an incorrect statement that the hon. Lady made, but I shall give way to her.

Mrs. Ballard: I am sure that the Minister knows well that the Local Government Finance (Supplementary Credit Approvals) Bill affects capital receipts for housing projects. We are talking about two county councils tonight, and county councils are not housing authorities, so they will not benefit from that Bill.

Mr. Raynsford: I am well aware of the responsibilities of county councils as opposed to those of district councils, but the hon. Lady said that there was no additional finance for local authorities. That is what I was correcting.

Mr. David Heath: Will the Minister give way?

Mr. Raynsford: I have already said that I shall not.
My hon. Friend the Member for Bolton, North-East (Mr. Crausby), in an impressive maiden speech, paid tribute to his predecessors and to his constituency, which I have had the pleasure of visiting a couple of times in the past two years.
The hon. Member for Banbury (Mr. Baldry), after a brief excursion via Bolton, with which he, too, has associations, focused on Oxfordshire and offered us an interesting suggestion. He said that the former Minister responsible for local government, the right hon. Member for Skipton and Ripon (Mr. Curry), had said privately that he would have considered relaxing Oxfordshire's cap had he remained in office. Hindsight is a wonderful thing, but it is not a basis for policy making, as I am sure the hon. Member for Banbury knows.
The hon. Gentleman asked whether the Minister of State's advice to councils before the general election had revealed the appropriate policy that the Government


would follow. My hon. Friend was absolutely clear in her advice to councils, both Labour and others, before the election. She said that if we were successful in that election, the new Government would work within the existing settlement, so all authorities should plan accordingly.

Sir Robert Smith: Will the Minister give way?

Mr. Raynsford: My hon. Friend the Member for Hayes and Harlington (Mr. McDonnell) outlined, in a speech of political philosophy, his view of capping. However, as he made no specific comment about Oxfordshire or Somerset, I shall move on to my concluding remarks.
We have carefully considered all relevant considerations in each authority's case before reaching our final decisions on the caps for Oxfordshire, Somerset and Warwickshire. The Minister of State has seen representatives of the authorities in person, and I have responded to Adjournment debates on both Somerset and Oxfordshire in recent weeks.
We are persuaded that the proposed caps are reasonable, achievable and appropriate in the light of all the circumstances of each authority, and of our view of the appropriate level of local authority spending as a whole. Local authorities are responsible for a quarter of all public expenditure, and no sensible Government can overlook that fact.
Some hon. Members have suggested that the cap may undermine our party's commitment to education. That is nonsense. We inherited this year's settlement from the previous Administration, and we made it clear well in advance of the election that we felt that we had no choice but to stick with it.
The Budget, however, makes it clear that we are committed to education. We are making extra provision of £835 million for schools. That is for revenue spending in 1998–99, and is £1 billion more than this year's figure. The new deal for schools will also provide an extra £83 million for repairs. We are committed to education and we are committed to local government. I commend the order to the House.

Question put:—

The House divided: Ayes 301, Noes 36.

Division No. 62]
[7.6 pm


AYES


Abbott, Ms Diane
Benton, Joe


Adams, Mrs Irene (Paisley N)
Best, Harold


Ainsworth, Robert (Cov'try NE)
Blackman, Liz


Allen, Graham (Nottingham N)
Blears, Ms Hazel


Anderson, Donald (Swansea E)
Blizzard, Bob


Anderson, Janet (Rossendale)
Blunkett, Rt Hon David


Armstrong, Ms Hilary
Boateng, Paul


Ashton, Joe
Borrow, David


Atkins, Charlotte
Bradley, Keith (Withington)


Banks, Tony
Bradshaw, Ben


Barron, Kevin
Brinton, Mrs Helen


Battle, John
Brown, Rt Hon Nick (Newcastle E)


Bayley, Hugh
Browne, Desmond (Kilmarnock)


Beard, Nigel
Buck, Ms Karen


Beckett, Rt Hon Mrs Margaret
Burden, Richard


Bennett, Andrew F
Burgon, Colin





Butler, Christine
George, Bruce (Walsall S)


Byers, Stephen
Gerrard, Neil


Caborn, Richard
Gibson, Dr Ian


Campbell, Alan (Tynemouth)
Gilroy, Mrs Linda


Campbell, Mrs Anne (C'bridge)
Goggins, Paul


Campbell, Ronnie (Blyth V)
Golding, Mrs Llin


Campbell-Savours, Dale
Gordon, Mrs Eileen


Cann, Jamie
Graham, Thomas


Caplin, Ivor
Griffiths, Jane (Reading E)


Casale, Roger
Griffiths, Nigel (Edinburgh S)


Caton, Martin
Grocott, Bruce


Cawsey, Ian
Grogan, John


Chapman, Ben (Wirral S)
Gunnell, John


Chaytor, David
Hall, Mike (Weaver Vale)


Chisholm, Malcolm
Hall, Patrick (Bedford)


Clapham, Michael
Hamilton, Fabian (Leeds NE)


Clark, Dr Lynda (Edinburgh Pentlands)
Hanson, David



Heal, Mrs Sylvia


Clark, Paul (Gillingham)
Henderson, Doug (Newcastle N)


Clarke, Charles (Norwich S)
Henderson, Ivan (Harwich)


Clarke, Eric (Midlothian)
Heppell, John


Clarke, Rt Hon Tom (Coatbridge)
Hesford, Stephen


Clarke, Tony (Northampton S)
Hill, Keith


Clelland, David
Hinchliffe, David


Clwyd, Ann
Hoey, Kate


Coaker, Vernon
Home Robertson, John


Coffey, Ms Ann
Hood, Jimmy


Cohen, Harry
Hoon, Geoffrey


Coleman, Iain (Hammersmith)
Hope, Phil


Colman, Tony (Putney)
Hopkins, Kelvin


Connarty, Michael
Howarth, Alan (Newport E)


Cook, Frank (Stockton N)
Howarth, George (Knowsley N)


Cooper, Yvette
Howells, Dr Kim


Corbett, Robin
Hoyle, Lindsay


Cousins, Jim
Hughes, Kevin (Doncaster N)


Cox, Tom
Hurst, Alan


Cranston, Ross
Hutton, John


Crausby, David
Illsley, Eric


Cryer, Mrs Ann (Keighley)
Ingram, Adam


Cummings, John
Jackson, Ms Glenda (Hampstead)


Cunningham, Jim (Cov'try S)
Jackson, Helen (Hillsborough)


Curtis-Thomas, Mrs Claire
Jamieson, David


Dalyell, Tarn
Jenkins, Brian (Tamworth)


Darvill, Keith
Jones, Barry (Alyn & Deeside)


Davey, Valerie (Bristol W)
Jones, Helen (Warrington N)


Davidson, Ian
Jones, Ms Jenny (Wolverh'ton SW)


Davies, Rt Hon Denzil (Llanelli)



Davies, Geraint (Croydon C)
Jones, Jon Owen (Cardiff C)


Dawson, Hilton
Jowell, Ms Tessa


Dean, Mrs Janet
Keeble, Ms Sally


Dismore, Andrew
Keen, Alan (Feltham & Heston)


Dobson, Rt Hon Frank
Keen, Mrs Ann (Brentford)


Donohoe, Brian H
Kennedy, Jane (Wavertree)


Doran, Frank
Khabra, Piara S


Dowd, Jim
Kilfoyle, Peter


Drew, David
King, Andy (Rugby & Kenilworth)


Dunwoody, Mrs Gwyneth
King, Ms Oona (Bethnal Green)


Eagle, Angela (Wallasey)
Ladyman, Dr Stephen


Eagle, Maria (L'pool Garston)
Laxton, Bob


Efford, Clive
Lepper, David


Ellman, Ms Louise
Liddell, Mrs Helen


Ennis, Jeff
Linton, Martin


Etherington, Bill
Lloyd, Tony (Manchester C)


Field, Rt Hon Frank
Lock, David


Fisher, Mark
McAvoy, Thomas


Fitzpatrick, Jim
McCafferty, Ms Chris


Fitzsimons, Lorna
McCartney, Ian (Makerfield)


Flynn, Paul
McDonagh, Siobhain


Follett, Barbara
McFall, John


Foster, Rt Hon Derek
McGuire, Mrs Anne


Foster, Michael Jabez (Hastings)
McIsaac, Shona


Foster, Michael John (Worcester)
Mackinlay, Andrew


Foulkes, George
McNamara, Kevin


Galbraith, Sam
McNulty, Tony


Galloway, George
McWalter, Tony


Gardiner, Barry
McWilliam, John






Mahon, Mrs Alice
Rowlands, Ted


Mallaber, Judy
Roy, Frank


Marek, Dr John
Ruddock, Ms Joan


Marsden, Gordon (Blackpool S)
Russell, Ms Christine (Chester)


Marshall, David (Shettleston)
Sawford, Phil


Marshall, Jim (Leicester S)
Sedgemore, Brian


Marshall-Andrews, Robert
Shaw, Jonathan


Martlew, Eric
Sheldon, Rt Hon Robert


Maxton, John
Shipley, Ms Debra


Meacher, Rt Hon Michael
Short, Rt Hon Clare


Meale, Alan
Singh, Marsha


Michael, Alun
Smith, Rt Hon Andrew (Oxford E)


Michie, Bill (Shef'ld Heeley)
Smith, Angela (Basildon)


Milburn, Alan
Smith, Miss Geraldine (Morecambe & Lunesdale)


Miller, Andrew



Mitchell, Austin
Smith, Jacqui (Redditch)


Moffatt, Laura
Smith, Llew (Blaenau Gwent)


Morgan, Ms Julie (Cardiff N)
Snape, Peter


Morgan, Rhodri (Cardiff W)
Soley, Clive


Morley, Elliot
Spellar, John


Morris, Ms Estelle (B'ham Yardley)
Squire, Ms Rachel


Morris, Rt Hon John (Aberavon)
Starkey, Dr Phyllis


Mountford, Kali
Steinberg, Gerry


Mowlam, Rt Hon Marjorie
Stevenson, George


Mudie, George
Stewart, Ian (Eccles)


Mullin, Chris
Stoate, Dr Howard


Murphy, Jim (Eastwood)
Stott, Roger


Murphy, Paul (Torfaen)
Strang, Rt Hon Dr Gavin


Naysmith, Dr Doug
Stringer, Graham


Norris, Dan
Sutcliffe, Gerry


O'Brien, Bill (Normanton)
Taylor, Rt Hon Mrs Ann (Dewsbury)


O'Brien, Mike (N Warks)



O'Hara, Edward
Thomas, Gareth (Clwdy W)


OIner, Bill
Thomas, Gareth R (Harrow W)


O'Neill, Martin
Timms, Stephen


Organ, Mrs Diana
Tipping, Paddy


Osborne, Mrs Sandra
Touhig, Don



Trickett, Jon


Pearson, Ian
Truswell, Paul


Perham, Ms Linda
Turner, Dennis (Wolverh'ton SE)


Pickthall, Colin
Turner, Desmond (Kemptown)


Pike, Peter L
Twigg, Derek (Halton)


Plaskitt, James
Twigg, Stephen (Enfield)


Pollard, Kerry
Vaz, Keith


Pond, Chris
Vis, Dr Rudi


Pound, Stephen
Ward, Ms Claire


Powell, Sir Raymond
White, Brian


Prentice, Ms Bridget (Lewisham E)
Whitehead, Dr Alan


Prentice, Gordon (Pendle)
Wicks, Malcolm


Prescott, Rt Hon John
Williams, Rt Hon Alan (Swansea W)


Primarolo, Dawn



Purchase, Ken
Williams, Mrs Betty (Conwy)


Quin, Ms Joyce
Wills, Michael


Quinn, Lawrie (Scarborough)
Winnick, David


Radice, Giles
Winterton, Ms Rosie (Doncaster C)


Rapson, Syd
Worthington, Tony


Raynsford, Nick
Wray, James


Reed, Andrew (Loughborough)
Wright, Dr Tony (Cannock)


Robertson, Rt Hon George (Hamilton S)
Wright, Tony D (Gt Yarmouth)



Wyatt, Derek


Robinson, Geoffrey (Cov'try NW)



Roche, Mrs Barbara
Tellers for the Ayes:


Rooker, Jeff
Mr. Greg Pope and


Ross, Emie (Dundee W)
Mr. Clive Betts.




NOES


Allan, Richard (Shef'ld Hallam)
Beith, Rt Hon A J


Ashdown, Rt Hon Paddy
Breed, Colin


Baker, Norman
Burnett, John


Baldry, Tony
Burstow, Paul


Ballard, Mrs Jackie
Cable, Dr Vincent





Campbell, Menzies (NE Fife)
Maclean, Rt Hon David


Chidgey, David
Maclennan, Robert


Davey, Edward (Kingston)
Oaten, Mark


Feam, Ronnie
Öpik, Lembit


George, Andrew (St Ives)
Rendel, David


Gorrie, Donald
Russell, Bob (Colchester)


Hancock, Mike
Smith, Sir Robert (W Ab'd'ns)


Harris, Dr Evan
Tonge, Dr Jenny


Harvey, Nick
Tyler, Paul


Heath, David (Somerton & Frome)
Webb, Professor Steve


Heathcoat-Amory, Rt Hon David
Willis, Phil


Hughes, Simon (Southwark N)



Jackson, Robert (Wantage)
Tellers for the Noes:


Jones, Nigel (Cheltenham)
Mr. Andrew Stunell and


King, Rt Hon Tom (Bridgwater)
Mr. Adrian Sanders.

Question accordingly agreed to.

Resolved,
That the draft Council Tax Limitation (England) (Maximum Amounts) Order 1997, which was laid before this House on 14th July, be approved.

Mr. Paul Tyler: On a point of order, Mr. Deputy Speaker. The hon. Member for South Suffolk (Mr. Yeo) may have unwittingly misled the House. He said that he and his Conservative colleagues would be voting against the order. Perhaps he was guilty of misunderstanding the situation or was misinformed. Certainly, he and his colleagues did not vote against the order. Perhaps he would like to explain why he unwittingly misled the House.

Mr. Richard Ottaway: Further to that point of order, Mr. Deputy Speaker. I believe that my hon. Friend has been misinterpreted. He said that he would not vote for the order.

Mr. Deputy Speaker (Sir Alan Haselhurst): I am sure that that explanation removes the need for any ruling by me

Orders of the Day — DELEGATED LEGISLATION

Mr. Deputy Speaker: With permission, I shall put together the motions relating to delegated legislation.

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Orders of the Day — OVERSEAS DEVELOPMENT AND CO-OPERATION

That the draft Asian Development Bank (Sixth Replenishment of the Asian Development Fund) Order 1997, which was laid before this House on 26th June, be approved.
That the draft International Fund for Agricultural Development (Fourth Replenishment) Order 1997, which was laid before this House on 26th June, be approved.

Orders of the Day — CONTRACTING OUT

That the draft Contracting Out (Metropolitan Police and Civil Staffs Pensions) Order 1997, which was laid before this House on 30th June, be approved.—[Mr. McAvoy.]

Question agreed to.

Orders of the Day — Thanet Regeneration

Motion made, and Question proposed, That this House do now adjourn.—[Mr. McAvoy]

Mr. Deputy Speaker (Sir Alan Haselhurst): Will hon. Members please leave the Chamber as quickly as possible, in fairness to the hon. Member who has the Adjournment?

Dr. Stephen Ladyman: Thank you, Mr. Deputy Speaker. I am also grateful to Madam Speaker for selecting this topic and giving me the opportunity to bring some of the problems facing Thanet to the attention of the House. I regard it as a great honour to have secured this debate.
I have made my home in Thanet, having lived there for six years even before I became its Member of Parliament. It is one of the few places in which I have found the same warmth of welcome as on my native Merseyside. It is a great honour for me to represent the people of the area and to present some of their problems to the House.
There is a great deal of misapprehension about Thanet. Because it is in the south-east, it is sometimes mistakenly thought of as a prosperous area. Indeed, only this week, my right hon. Friend the Secretary of State for Health referred in a television interview to "the prosperous south-east". That rather innocuous remark upset many of my constituents, who are far from prosperous.
I happen to know that my right hon. Friend knows Thanet well—he even visited me during the general election campaign—and I am certain that he intended to say, "the prosperous parts of the south-east", but none the less his remarks added to a picture which suggests that Thanet is not really the problem area that we make it out to be.
I want to bring some of the facts to the attention of the House. There is considerable economic deprivation in Thanet, which leads directly to social deprivation. As it happens, only 80 per cent. of my constituency is in Thanet, the other 20 per cent. being in the Dover district, but Thanet's social deprivation is exported throughout the constituency, so everybody suffers from it.
In June this year, unemployment in Thanet was 10 per cent., down from 10.7 per cent. in May. One should compare that with unemployment in the south-east as a whole, at 3.7 per cent., and in Kent, at 5.4 per cent., and with the national average, at 5.6 per cent. Our unemployment is higher than that in Glasgow or on Merseyside.
The problem is even worse than those figures suggest, because Thanet has a large tourist industry and a large agricultural industry, so unemployment is depressed in the summer months as a result of seasonal work. The figures later in the year will show our unemployment to be as high as 14 per cent.
Eight of the wards in Thanet—large, three-member wards—are in Kent's top 50 for social deprivation. Some of the wards in my constituency have male unemployment as high as 60 per cent. There are 4,015 children in Thanet who receive free school meals. Despite above average A-level results, the number of students going on to further education is half the Kent average, as a result of the low wages in their households.
In Thanet, 51,852 homes lack the exclusive use of a bathroom; 70 per cent. of council tenants receive rent rebates; 30 per cent. of households include a council tax benefit claimant; and there are 900 empty business premises. The statistics go on and on. One, which I discovered only this week, really horrified me: 41 per cent. of the households in Thanet have a total income of less than £10,000 a year. To put that in perspective, Members of Parliament receive £12,000 a year just to cover our additional costs for having to live away from home for a few days a week. My constituents have to live on that money for the whole year.
Progress has been made; there is no question about that. The first step along the route to progress was that the European Union recognised our problems and granted us objective 2 status. That embarrassed the previous Government, who granted us assisted area with development area status. We have also managed to make some successful single regeneration budget and lottery bids, and further progress was made in May 1995, when the good people of Thanet, for the first time, overwhelmingly returned a Labour council.
That council has begun the business of transforming Thanet. It first transformed its financial management, and I shall come to the significance of that later. We built a superb regeneration and economic development unit in the council. The overriding aim of our manifesto was to create jobs. In that endeavour, we have received wonderful help over the past 12 months from the Government Office for the South East. When we first got objective 2 status, I do not think that GOSE or the then Conservative council knew how to exploit it. Since 1995, we have learnt together, and over the past 12 months, the office has come up trumps.
The council has transformed itself into what we call a quasi-local development agency. Now it can start to attract inward investment. The council created two business parks. One, which was entirely in private hands, was created by threatening compulsory purchase, although we were willing enough to work with the developer to make progress.
The council also purchased 10 acres of land from its meagre resources to build a second business park, known as Thanet Reach. The two parks are now built, serviced and ready for jobs; Kent international business park has already attracted an investment from the Cummins group, and the building of its factory has been started, which is good news indeed.
We have attracted some other major investments. Holyman-Sally is to invest £85 million in catamarans, to run from Ramsgate; Dreamland Ltd. has started to refurbish the fairground at Margate and to construct, in an adventurous arrangement with the local council that will lead to the renovation of a large area of Ramsgate, a designer outlet called Ramsgate Boulevard, which we hope will attract thousands of people to the town.
I want to say a little more about the governance of regeneration. Although the economic development unit and the efforts of GOSE have been a step forward, we have been less successful in some other areas. There has been little democratic membership of the regeneration partnership, at the direct instructions of the previous Government. We fought long and hard, and now we have eventually been allowed to put some councillors on that partnership. The council would also like the local Member


of the European Parliament to be on it. I hope that the Government will one day make it clear that they will allow him to be on the partnership.
Some of our endeavours suffer from a lack of support from some of the quangos that should be helping us. English Partnerships has always talked a good fight, but backed away from it at the last moment. For the first few years of its life, East Kent Initiative seemed more interested in the channel tunnel than in Thanet, and for the past few years it seems to have been misdirected and looking for a mission in life. Now, it merely stands between us and inward investors. A new organisation, Locate in Kent, has been set up. I hope that the regeneration unit of the local council will be able to deal directly with that organisation. It can attract the inward investors, and the council can then turn that contact into real development.
I met the chief executive of Locate in Kent yesterday. It was a helpful meeting and I was encouraged by what he said. He gave me his corporate brochure, which I read before making this speech, and I was horrified to see that it does not mention the Thanet Reach business park or include one of the major roads into Ramsgate, which I do not find encouraging. If Locate in Kent does not tell the whole story about Thanet, who will? I hope that he will put that right.
I welcome the Government's proposals for regional development agencies, but I hope that the Minister will ensure that when they are set up, they report to a Minister, that they have full democratic control and that the regeneration unit of Thanet council will be able to work directly with them. I also ask that we work out what the council and the regional development agency should each do and ensure that they do not stand on each other's toes and duplicate effort.
We have some serious infrastructure problems, which need to be tackled. I shall take the House on a quick drive into Thanet. The A299 is being dualled, which is a step forward, but the dualling terminates on the A253, so there is no dual carriageway into Ramsgate. Furthermore, someone driving a 40-tonne lorry into our port has to go through the heritage town and round a hairpin bend—in fact, there are two sharp bends—which was intended for the horses and carts of Wellington's army, not a 40-tonne articulated truck. The Ramsgate harbour approach road is badly needed. The tragedy is that it is fully funded, it had been through all its planning processes and the archaeological work had started, when the new Conservative county council, elected on 1 May, decided to put the project on hold. All that the county council has succeeded in doing is to worry our inward investors. I ask the Government to do whatever they can to give the county council a kick up the pants and tell it to get on with building that road.
When one comes into Ramsgate and turns right on the A256, one leaves Thanet, but quickly comes to the jewel in our local crown—it is also one of the jewels in the United Kingdom crown. Pfizer is a pharmaceutical and animal health company—the largest animal health company in the world and the fastest-growing human medicine company. It is the fastest growing because it has the most successful research organisation, and the most successful component of that research division is in Sandwich. Several thousand people work there and another thousand will work there in five years, but not unless we upgrade the roads to the Pfizer site.
The company has already decided to move 300 jobs to the M25 corridor. That will be the thin end of the wedge, unless we give it the infrastructure improvements that it needs.
If one turns left from the A253 on to the A256, one can see that we also need to improve the road to Thanet Reach. We also desperately need a decent rail link. I call upon the Government to work with Railtrack to build a fast link from Thanet to Ashford, to join the high-speed rail link to London. The joke is that Pfizer came to my constituency in the mid-1950s because of the high-speed rail link that existed then. Unfortunately, it is the same high-speed link now, only a good deal dirtier and less well kept.
Grants are important if we are to attract inward investment, but inward investors tell us that they are typically offered £16,000 a job to invest in Thanet, whereas they can get £30,000 a job to invest in Wales. I realise that there will be some dispute over those figures. The Minister may even challenge them, but that is what inward investors are telling us, so either the figures are correct or their perception is wrong. We need to deal with the problem, whichever it is.
We need quality jobs with decent rates of pay. I was horrified to find out that GOSE offered someone a lower grant than he ought to have had because it thought that he would pay too much. He wanted a trained and motivated work force. GOSE thought that he should have a low-paid work force. That was some time ago. I hope that GOSE does not have that attitude now, and I call on the Minister to confirm that it does not.
Council finance is another important element. Because of our large housing benefit problem—we pay out about £40 million in housing benefit to low-paid people and suffer from what is sometimes called dole by the sea—the net cost to the council is £3 million a year. That £3 million, which the Secretary of State of the time said would not fall on councils, comes out of the general fund budget of only £15 million. If we had that money, we could spend it on local business, small businesses and tourism. As we do not have it, those businesses suffer. I call on the Government to keep a promise made by the previous Government, who said that they were going to deal with that problem.
This week, we heard that RAF Manston is to close. I should be pleased if the Minister responsible was prepared to meet me and others from Thanet to discuss the transition to private use. The closure will upset many people in Thanet—they remember Manston when it was the front line of the battle of Britain, so they have a sentimental attachment to it. If it has no military use now, we could at least make it into a private, specialised airfield, which could create thousands of jobs.
I must briefly mention health care, because East Kent health authority has today launched a review of health care throughout east Kent. I was disappointed with a written answer that I received tonight from the Department of Health, which tells me that clinical need will be "a major component" of the priorities considered by that review. It ought to be the primary component. I call on the Minister to say so.
In conclusion, we have had lots of bad news in Thanet recently, even since the general election. The county council has attacked the harbour approach road, the Ministry of Defence has closed down RAF Manston and


the local health trust has decided that it wants to close Ramsgate hospital. Now is the Minister's opportunity to give me some good news. If she cannot do so tonight, let her at least tell me that the Government are committed to reviewing those issues and that some time during the next five years I shall have action on them to take back to the good people of Thanet, who desperately need the Government's help.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Angela Eagle): I congratulate my hon. Friend the Member for South Thanet (Dr. Ladyman) on his success in achieving this Adjournment debate and on his election success. I visited his constituency a couple of years ago to look into some employment issues with the local employment service as a member of the Select Committee on Education and Employment. I remember thinking that his constituency was very like mine—Wallasey—and wondering why it had a Conservative Member of Parliament. At the election, he put that right.
Thanet gained European Union objective 2 status in 1994, reflecting the economic decline that the area has suffered in recent years—a decline that my hon. Friend highlighted well. Objective 2 programmes tend to be of three-year duration. The first ended in 1996 and involved about £11 million of grant aid. The new programme started from January and will mean another £14 million of grant aid to support a range of local initiatives. My hon. Friend's point about the high levels of unemployment was well taken—my constituency suffers similar levels. To date, Thanet has received £13.6 million in regional selective assistance, with further investment of £85 million levered in as a result of the grants, to create more than 1,800 jobs. In addition, £9 million spread over five years was allocated to the Thanet Regeneration Partnership in 1995–96 under round 1 of the single regeneration budget and a range of projects are already under way and achieving results. The partnership also submitted a bid under round 3 and secured a further award of just under £6 million.
Thanet also benefits from European funding under the INTERREG Community initiative, which includes two initiatives that will spend £3.2 million in Thanet alone. Taken together, those grants represent a substantial commitment to Thanet by the Government and the European Union and they reflect confidence in Thanet's ability to deliver results.
Since coming to power, the Government have spelt out the new approach that we want to bring to regeneration. We do not regard regeneration as being only about schemes and projects or bricks and mortar; it is also about social regeneration—people are as important as buildings. In our approach to round 4 of the single regeneration budget, we have spelt out our concern to attack the causes of social and economic decline and exclusion and to tackle the needs of deprived communities. That means collaboration and partnership at local level.
We want an integrated approach, and we have started at the top with the new Department of the Environment, Transport and the Regions. We also want integration at regional level. My hon. Friend mentioned bodies in the

south-east such as East Kent Initiative and Locate in Kent. National bodies such as English Partnerships also have a role to play in the region. I sympathise with my hon. Friend because more than 40 such organisations are operating in Merseyside. I am certain that a more integrated approach would bring real benefits and avoid some of the duplication and confusion that has arisen from current arrangements. That is where our proposals for regional development agencies come in.
I am pleased that my hon. Friend supports the move to regional development agencies. The Government regard them as an essential first step to effective, co-ordinated, strategic regional economic development that will enable the English regions to improve their competitiveness. One of our important jobs will be to bring together the various regional organisations and help them work together to ensure that the regions gain the greatest possible benefit from their efforts.
Ministers are still considering what arrangements are appropriate to the specific needs of each region. That is why the Government Offices in all regions are carrying out a national consultation exercise to ensure that Ministers have access to as wide a range of views about future structures as possible. Local authorities are included in the process and I am sure that they will make a valuable contribution to the development of that policy. I look forward to Thanet district council's contribution. A consultation event, one of a series organised by the Government Office for the South East, takes place in Kent next week. The opinions expressed then will be weighed carefully.
My hon. Friend mentioned the membership of the monitoring committee that steers and oversees Thanet's objective 2 European funding. The approach taken by the Government Office for the South East reflects current Government policy. However, those of us who represent constituencies that receive European Union structural funds are only too well aware of the frustrations that some of these arrangements have created. It is a question of balancing proper monitoring with efficiency and accountability, a balance with which Government Offices continue to wrestle. The arrangements are set out in the single programme document and the European Union expects them to be fulfilled.
I am aware that the Member of the European Parliament for Kent, East has written to my hon. Friend the Minister for the Regions, Regeneration and Planning raising his possible membership of the monitoring committee. Of course Members of the European Parliament have a legitimate interest in the way in which programmes are implemented. I am aware of the views of several of them on the matter, which I shall take up with colleagues.
I should also like to take this opportunity to assure my hon. Friend that the Government Office for the South East is working actively and closely with Thanet district council and local partners to ensure that the forthcoming 1997 to 1999 phase of the objective 2 programme delivers maximum benefit for the regeneration of the area.
The Ramsgate harbour approach road is part of the pilot capital challenge scheme announced last year by the previous Government. Kent county council was successful in securing credit approval worth more than £25.9 million over three years to build the road. More than a third of the allocation available for the whole south-east region


has been set aside for that one scheme. As my hon. Friend knows, the scheme seeks to provide a new link between the strategic road network and Ramsgate harbour and is regarded as a major catalyst in the diversification of Ramsgate port, creating environmental benefits for the town while aiding the economic regeneration of the Thanet area.
It is therefore surprising that Kent county council is holding up the scheme that it championed so effectively when it made the bid. The county council changed hands when the Conservatives took control at the last election. It is reviewing the system of road schemes in its area. I hope that it comes to a conclusion quickly but I note that my hon. Friend's predecessor, Jonathan Aitken, said:
Our town of Ramsgate needs and deserves this road.
In the same debate, he was supported in his plea by the hon. Member for North Thanet (Mr. Gale), who said:
I endorse his arguments utterly and whole-heartedly."—[Official Report, 4 December 1996; Vol. 286, c. 1181.]
I sincerely hope that whatever its decision, Kent county council will get on with it and remove the uncertainty.
By far the largest road building scheme being funded in Kent is the A299–A253 extension, which is the Isle of Thanet's link to the M2 and the strategic road network. My Department is funding Kent county council's scheme to upgrade the road to dual carriageway standard with grade-separated junctions at a total estimated cost of more than £170 million. There are no short-term plans to improve the A253 between Prospect Inn and Lord of the Manor. It is for Kent county council as the local highway authority to develop proposals for that section of the road and bid for funding of the scheme in the usual way.
From a local transport point of view, Kent has done extremely well in recent settlements, taking more than 10 per cent. of national resources. In 1997–98, it will receive £77.3 million in financial support. In a year when the financial constraints bit hard, that compares well with the previous year's figure of £81.6 million.
I note my hon. Friend's comments about rail services in Thanet. The area is served by three trains per hour from London, provided by Connex South Eastern. As he said, the journey time is about one hour 45 minutes. I understand that that will be reduced when the channel tunnel rail link comes into operation. He mentioned a fast connection via Ashford. The Stour Valley line between Thanet and Ashford via Canterbury has been identified as needing upgrading to become a strategic link between Thanet and London linking into the channel tunnel rail link at Ashford. I am sure that he will be watching for progress.
The franchising director has powers to support and encourage investment in new railway services. He has developed criteria for appraising proposals to support new services that offer wide public benefit but may not be viable on a purely commercial basis. He has made recommendations on that criterion that Ministers are considering, but it will be for potential operators of new services to approach him with their proposals.
On attracting quality jobs, I strongly agree with my hon. Friend that casualised or low-paid jobs are not the answer to creating proper, sensibly based regeneration. I am pleased that he supports the Government's intention to legislate for a national minimum wage. I am not aware of the case that he described where an applicant for

regional selective assistance apparently received less grant because the previous Government thought that the wages that he was paying were too high. Conservative Members were boasting only yesterday in another Adjournment debate about how low agricultural wages were. They never seem to learn. Rest assured, this Government do not share those opinions.
My hon. Friend also asked about RAF Manston. Naturally, Government Office for the South East officials wish to maintain a close working relationship with local partners to monitor developments with regard to the future of RAF Manston and to evaluate how the site may be used to assist in Thanet's economic regeneration. In view of the announcement earlier this week by the Ministry of Defence on the proposed withdrawal of the RAF from Manston, the Government and local partners are examining the potential civil development of the site with renewed urgency. However he will appreciate that at this stage I am not in a position to be more definite.
The administration of housing benefit is a matter for the Department of Social Security, but I will pass on my hon. Friend's observations. As he knows, 95 per cent. of private sector housing benefit expenditure by authorities is returned direct to them. The remaining 5 per cent. is fed into authorities' general funds through the revenue support grant mechanism. An additional 0.5 per cent. is fed into the general fund in recognition of authorities' expenditure in what are known as incentive areas, where they stand most chance of controlling their administrative expenditure through their own efficiency.
I understand that in some circumstances an authority may lose out, for example when a rent determined by the rent officer is lower than the actual rent that the authority is required to meet. However, changes to the housing benefit rules in 1996 have reduced that problem and a discretionary lump sum is available from the Department for Social Security to meet extra cases of hardship.
I am aware that the council made representations to my Department through the then sponsor Minister for the south coast at the end of last year. The council wanted the capping regime amended so that its expenditure on housing benefit would be disregarded. The previous Government refused to do that and my hon. Friend will not expect me to give a commitment on such a complex issue tonight. The funding regime for 1997–98 is now fixed, but it will be open to Thanet to make representations for next year at the appropriate time.
This has been a wide-ranging debate. Indeed, my hon. Friend set me a formidable task of trying to answer the many questions that he asked. I am sure that I have not dealt with all of them, but he has left the Government in no doubt about the needs of his area. He is already proving that he is a doughty fighter for his constituents. Some of the issues that he brought up tonight are already being addressed and local partnerships and individual members of the community deserve much credit. There is still much to do, and my hon. Friend has illustrated the wide range of departments and agencies with responsibilities in the area. The challenge now faced by Thanet and its partnerships is to use all the resources available to secure a successful future for their people.

Question put and agreed to.

Adjourned accordingly at ten minutes to Eight o'clock.